The US Federal Reserve voted to raise interest rates on Wednesday for the first time since 2023 as the central bank continues to fight to tamp down inflation.
The Fed’s open market committee voted unanimously to raise its benchmark interest rate by a quarter-percentage point to a range of 3.75% to 4%. This is the first time the Fed has raised rates since July 2023 and potentially sets Kevin Warsh, the current Fed chair, on a collision course with Donald Trump.
“The plain fact is that inflation is too high and has been for too long,” Warsh said on Wednesday. “This summer’s inflation readings do not tell me that underlying trends have meaningfully improved.”
I actually feel bad for the fed. They have 2 jobs and 1 left lever. Inflation is not high because most Americans are overemployed and making too much money - which is what the higher rates are supposed to address. Inflation is high because our administration and Congress are absolute fucks.
But the Fed can’t end wars or tax wealth…so they raise the rate which will result in less employment but isn’t all that likely to affect inflation due to the asymmetric distribution of consumer spending. Stagflation seems inevitable without Congress doing it’s in job