The Progressive


A project of Common Dreams

For Immediate Release

Jeremy Funk,

Fed Chair Again Ignores Recession Risks Under Higher Interest Rates

During the annual Jackson Hole Economic Symposium today, Federal Reserve Chairman Jerome Powell announced: “Although inflation has moved down from its peak—a welcome development—it remains too high. We are prepared to raise rates further if appropriate.” Powell’s hawkish tone on higher interest rates comes on the heels of a new survey finding U.S. consumer demand is contracting for both manufactured goods and services, which in turns threatens layoffs. Powell made no acknowledgement of the warnings voiced by a chorus of experts that continuing to raise rates would needlessly cause a recession and cost millions of Americans their jobs.

“The Fed’s interest rate hike strategy has done little to contain the corporate greed epidemic fueling high costs, while it has been very effective at extinguishing consumer demand,” said Liz Zelnick, Director of government watchdog Accountable.US’ Economic Security & Corporate Power program. “If the Fed moves forward with another interest rate hike that puts new cars and houses out of reach for many Americans, it could drive demand down to dangerous territory, tarring the economic gains led by the Biden Administration. History has shown that raising interest rates, especially as aggressively as the Fed has done it, almost always leads to low-wage worker harm. The Fed should pump the brakes on future rate hikes.”

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