To say that the Biden economy is struggling would be a vast understatement. In fact, there are serious concerns about how this period of post-pandemic recovery could actually be as horrible as it is for the US fiscal outlook, but, then again, nothing about this administration has come easy.
Now, as inflation continues to top 40-year highs, the Federal Reserve is making another historic interest rate hike, just one month after a similar move.
The Federal Reserve on Wednesday enacted its second consecutive 0.75 percentage point interest rate increase as it seeks to tamp down runaway inflation without creating a recession.
In taking the benchmark overnight borrowing rate up to a range of 2.25%-2.5%, the moves in June and July represent the most stringent consecutive action since the Fed began using the overnight funds rate as the principal tool of monetary policy in the early 1990s.
It’s been nearly half a decade since rates were this high.
While the fed funds rate most directly impacts what banks charge each other for short-term loans, it feeds into a multitude of consumer products such as adjustable mortgages, auto loans and credit cards. The increase takes the funds rate to its highest level since December 2018.
The Biden administration has consistently suggested that our nation is not heading toward an inevitable recession, despite a glut of severe warnings from economists around the nation.