(WLIO) - The Federal Reserve gave a blunt solution to finally tame painfully high inflation with slower growth, higher unemployment, and potentially a recession.
Speaking at a news conference yesterday, Chairman Jerome Powell acknowledged what many economists have been saying for months. That the Fed's goal of engineering a "soft landing", in which it would manage to slow growth enough to curb inflation but not so much as to cause a recession, looks increasingly unlikely. The Federal Reserve raised interest rates by another .75, which causes prices to rise like car and student loans and credit card debt. Senator Rob Portman says if you look at the numbers, the United States is already in a recession.
"I am not suggesting that we are in a deep recession, but if you look at the economic numbers the last two quarters, we have had negative economic growth and that is typically the definition of a recession," says Portman. "The job market has stayed pretty strong, there are other factors out there that have kept us going and that is good. My hope is that we won't dip into a recession, but I think the odds are that we will."
While inflation remains at a 40-year high and everybody is feeling it even though wages have gone up slightly, the problem is that the cost of everything has gone up even higher.
"If you had a dollar in your pocket when President Biden was sworn into office, that now is worth 88 cents," adds Portman. "That is one way to look at it. That's a real problem. For a lot of my constituents who are invested in the stock market through their 401k or their pension plan, you know they have seen big drop there as well."
Other banks around the world are raising their interest rates in hopes to slow the economy and in turn, reduce inflation.
