WASHINGTON, DC — After an unprecedented 11 increases in 17 months, the Federal Reserve today announced a long-overdue interest rate pause, finally heeding dire warnings from a chorus of lawmakers, academics, and economists that the economy could tip towards a recession if the rate hikes continue. Government watchdog Accountable.US called the stoppage long overdue, citing the toll raising interest rates has already taken on consumer demand and the financial well-being of American families.
The Fed’s decision to pause interest rates should have been made months ago—as soon as it became clear that their hawkish policy has hindered economic recovery while doing little to squash the corporate profiteering epidemic fueling high prices, led by Big Oil and Gas and corporate landlords,” said Liz Zelnick, Director of Accountable.US’ Economic Security & Corporate Power.
“It’s irresponsible to continue rate hikes when the policy gambles with millions of peoples’ jobs and does little to curb profiteering corporations. Now, it’s time for the Fed to step aside and allow Congress to resolve the true driver of skyrocketing prices: corporate greed.”
FED’S INTEREST RATE HIKE SPREE HURT ECONOMY AND FAMILIES WHILE DOING NOTHING ABOUT GREEDFLATION:
- Most Americans Hurt by High Rates: CNBC, 7/21: “Most Americans said rising interest rates have hurt their finances in the last year. About 77% said they’ve been directly affected by the Fed’s moves, according to a report by WalletHub. Roughly 61% said they have taken a financial hit over this time, a separate report from Allianz Life found, while only 38% said they have benefited from higher interest rates.”
- Fed rate hike hurt economy over long-term: USA Today, 8/28: “Broadly, a percentage point increase in interest rates could reduce economic output by 1% up to nine years later, the authors say. Since the Fed has raised its key interest rate by 5.25 percentage points since March 2022, that suggests the campaign could lead to a 5% reduction in output in coming years.”
- Greedflation is not letting up: MarketWatch, 8/3: “The second-quarter earnings season so far is showing that one trend that featured in the first quarter has not gone away. ‘Greedflation,’ or the practice of companies raising prices to protect their profit margins, is alive and well, based on the number of companies that have so far acknowledged raising prices yet again, even as inflation readings have come down and as some acknowledge that their input costs are falling. At the same time, companies continue to emphasize on earnings calls that their customers are showing signs they are weary of higher prices and are shopping more frequently at more stores, while spending less per trip.”