Phillip Q. Shrotman
The Fed Is Way Off
After teaching at Long Beach City College for 30 years, I can't believe Jerome Powell and The Federal Reserve, could pass our Freshman Economics class. The continous increases in interest rates does nothing to reduce inflation. These rate increases cause inflation.
Is gas cheaper now? Are prices in the market reduced? Has inflation been brought under control? The answers are resounding. NO!
Amid turmoil in the financial sector and uncertainty ahead, the Federal Reserve will likely approve a 0.25 percentage point increase at this week’s policy meeting.
That will mark one year since the central bank began the current rate-raising cycle.
Over the last 12 months, inflation spiked to a 40-year high and only recently started to ease, but all of that monetary policy tightening has been tied to issues that are disrupting the banking industry now.
For consumers, that means they must still pay a higher price to borrow while continuing to grapple with a persistently high cost of living — all while suffering a crisis of confidence when it comes to their savings accounts.
“They are right in feeling these are dire economic times,” said Tomas Philipson, a professor of public policy studies at the University of Chicago and a former acting chair of the White House Council of Economic Advisers.