As the Federal Open Markets Committee (FOMC) prepares to release its Meeting Minutes giving the public more insight on members’ policy views, government watchdog Accountable.US spotlighted recent baffling remarks from Federal Reserve Governor and FOMC Member Christopher Waller arguing interest rates need to continue to rise despite the negative impact it will have on economic growth. As government watchdog Accountable.US has documented, the Fed’s insistence on repeatedly raising interest rates runs counter to warnings from a wide array of economic experts, labor leaders, and lawmakers who say doing so will make inflation worse and destroy millions of jobs, all while doing little to address inflation drivers like corporate profiteering.
During remarks at the “59th Annual Economic Forecast Luncheon” on November 16th, Mr. Waller stated, “economic growth in the United States has slowed significantly in 2022, and I expect that slow growth to continue into next year.” Waller went on to say: “at any other time, I would be pretty unhappy about slowing growth, but not now.” Waller concluded his remarks by stating: “[a]lthough I believe we are seeing some progress in the economy to dampen demand that will help moderate inflation, we have not yet made enough progress…. We still have a ways to go. Until then, I support continued rate increases and ongoing reductions in the Fed’s balance sheet to restrain aggregate demand.”
Another top Fed official admits aggressive interest rate hikes have only slowed down the economy and yet wants to stay the course with what’s not working. Apparently, millions of Americans likely losing their jobs under further rate hikes is a sacrifice the Fed is willing to make – themselves and their Wall Street friends excluded of course. The Fed’s ill-advised policy only draws attention from the real culprit behind out-of-control costs: corporate greed. Highly profitable corporations have kept raising prices on working families without justification while rewarding wealthy investors with billions in new handouts. Instead, the Fed wants to keep playing chicken with the economy with sky-high interest rates that more experts warn will lead to millions of pink slips. Throughout the pandemic, the Fed has catered to demands from big banks, hedge funds and other Wall Street special interests at the expense of average working families. If excessive interest rate hikes hasten the arrival of an otherwise avoidable recession, will the Fed take responsibility – or try to pass the buck as they keep making matters worse?”
Liz Zelnick, spokesperson for Accountable.US
Waller’s remarks follow recent comments from Kansas City Fed President Esther George that recession seems inevitable, even as the Fed plows ahead with more aggressive rate hikes. George claimed that the “labor market [that] is so tight, I don’t know how you continue to bring this level of inflation down without having some real slowing, and maybe we even have contraction in the economy to get there.”
Earlier this month, the FOMC, the Federal Reserve body which determines interest rates, announced a 75 basis points interest rate hike, the sixth increase in eight months, over expert warnings that doing so would cause a recession and cost as many as 3.2 million people their jobs by the end of 2023.