(JustPatriots.com)- Federal Reserve Chairman Jerome Powell warned in a speech to investors last Friday that in this economy there is pain ahead for American households. The markets took another downturn while he spoke.
Inflation continues to remain high at 8.6%. Gas price, while they have decreased significantly from how expensive they became when President Biden took office, are still well above what they were just two years ago. Despite the messaging from the White House and leftist mainstream media trying to reinvent the meaning of “recession,” the economy is clearly in a recession as GDP has taken a downturn for two consecutive periods.
“[Our) overarching focus is to bring inflation back down to our 2% goal. While higher interest rates will bring down inflation, they will also bring some pain to households and businesses. These are the unfortunate costs of reducing inflation,” Powell said.
"(Our) overarching focus is to bring inflation back down to our 2% goal. While higher interest rates will bring down inflation, they will also bring some pain to households and businesses. These are the unfortunate costs of reducing inflation."
Jerome Powell à Jackson Hole. pic.twitter.com/za7ETypA8Y
— Jean Louis (@JL7508) August 26, 2022
During and after his remarks, the market took a deep plunge southward. The Dow Jones fell 500 points.
The Fed began to significantly increase interest rates to combat inflation in March 2022. The rate went from .08 to 2.33. Inflation is projected to become worse as the federal government continues to spend money it does not have. After continuously giving Ukraine tens of billions of dollars, Democrats passed the Inflation Reduction Act which will grow spending by $467 billion.
The Congressional Budget Office says that the legislation’s effect on inflation will be negligible in 2022 and into 2023. The higher taxes on corporations will reportedly have a minimal effect on revenue gained in order to offset the spending as the increases taxes will raise prices for households, further chipping away at consumer spending power. Subsidies on the climate which includes electric vehicles may not alleviate the sticker price for families who cannot afford electric vehicles.