Over the last month, President Biden has shown the American people the kind of person they elected to lead the country. His complete hands-off approach to the economy with the Federal Reserve jacking up interest rates in response to his inflation and to curb price growth is shameful. With the rising interest rates, economists fear a recession could be right around the corner as the price hikes weigh the dollar down.
Claudia Sahm is a former Fed research director, and author of Stay-At-Home Macro offered her insight into the situation On June 16th. “High inflation is a big problem. The Fed showed us again yesterday by raising rates that they are working on getting it down as quickly as possible without causing a recession. But that’s a tall order, and its tools cause pain, too.”
Given that the Fed’s mission is to be the first line of defense against inflation, and under federal law, they are required to ensure we have a strong job market with stable prices. They use the baseline interest range as their main weapon when fighting against inflation. With the baseline, they can increase borrowing costs through the economy. The more interest rates rise, the less that businesses and households can spend on high-demand goods and services. They also sink stock prices and home prices. The wealthy are often less willing to spend money at this point as well.
All this is designed in the hopes of prices plateauing and eventually falling due to fewer people being willing to pay their prices. Economists generally agree that raising the rates like this is the best way to get the economy back on track, especially since the Fed refused to raise rates earlier. They also blame the stimulus checks by Biden and Trump for increasing inflation.
If those stimulus checks pushed inflation higher, then economists, and the country as a whole, have a massive problem on their hands. Giving adult Americans a few grand back that they may have lost due to work or to make up for paying higher prices due to a lack of supply because of COVID was a brilliant idea. For many, it’s how they were able to survive the pandemic.
Fed Chairman Jerome Powell spoke just after the latest federal rate hike on June 15th, hitting the American people with the worst rate hike since 1994. “We feel that there’s a role for us in moderating demand. Those are the things we can affect with our policy tool.”
He continued, “We never think too many people are working and fewer people need to have jobs, but we also think that you really cannot have the kind of labor market we want without price stability. We’d love to get back to that place. But to get there, it’s not going to happen with the levels of inflation we have.”
This kind of warning is one the American people need to hear, even if they don’t want it. It also points more and more to Biden’s long-game plan of doing nothing about these interest rates. He wants to push the American people into socialism.
Biden wants to see everyone broke, unable to find jobs that will pay enough to keep them alive and to make the American people dependent on the government to live. It is a way for him to ensure he can remain in power, and the American people get weaker and weaker. This is the left’s dream, and doing nothing allows the Fed to do it for him.