More Federal Reserve officials are predicting a severe economic downturn, with Kansas City Fed President Esther George the latest regional Fed president to claim that recession seems inevitable, even as the Fed plows ahead with more aggressive rate hikes that leading experts conclude will cost millions of jobs. 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.”
A recent analysis from Accountable.US spotlighted a growing chorus of warnings from a wide array of economic experts, labor leaders, and lawmakers who conclude hiking interest rates too quickly could make inflation worse and further hurt working class Americans, all while doing little to address inflation drivers like corporate profiteering. Earlier this month, the Federal Open Markets Committee (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.
Even Fed officials recognize American families are headed towards economic pain, yet the Fed remains on the same tortured path towards more aggressive job-killing interest rate hikes. Policy-makers must turn their full attention to 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 has been focused on playing chicken with the economy with sky-high interest rates that more experts warn could erase millions of jobs. 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?”