Skip to content

Washington’s Bias For Continuous Inflationism

Last week, Federal Reserve Chair Jerome Powell delivered his semiannual testimony to Congress. A main feature of the discussion was the status of rate hikes and the fight against inflation.

In short, Powell’s inflation fight isn’t over.

Thus, a federal funds rate of 5.25% isn’t enough to contain rising prices. Ideally, a rate on the order of 7% to 7.25% is needed to do the trick.

After its recent FOMC meeting, the Fed signaled two additional rate hikes this year.  As part of this week’s testimony, Powell validated this … remarking it was a “pretty good guess.”

So why pause in the first place?

This post appeared first on Money & Markets, LLC.