(HorizonPost.com) – 2022 saw inflation rates reach a 40-year high, which was largely spurred by untamed federal deficit spending that is continuing to grow as the result of bigger and bigger spending packages passed by Congress. While the Federal Reserve tries to slow down and reverse the course of inflation, market volatility has ensued.
The Federal Reserve is attempting to combat inflation by continuing to increase interest rates, with the newest prediction being a rate of 5%, according to Newsmax. Last month, the U.S. Labor Department reported higher-than-expected job growth where an additional half a million jobs were added to the economy. Falling prices in contracts indicated that the Fed would continue to raise interest rates 5%-5.25% range as early as May.
Earlier in February, the Fed increased rates by a quarter of a percentage point, 4.5%-4.75%, saying that “ongoing” increases should be expected. But financial markets reportedly took that as a good sign and anticipated just one more hike sometime in March.
Brandon Pizzurro, director of public investments at Guidestone Capital Management, commented on how “dire” the situation must be for the Fed to continue to hike up rates, saying that “futures are finally waking up to the reality.”
Fed Chair Jerome Powell is countering traders who expect rates to be cut later in the year, noting that he does not think inflation will fall fast enough for that to happen.
The news of rising rates comes as the future of the economy remains uncertain for many Americans with retirement and pension plans, which are reportedly experiencing the side effect of the Biden administration policies, according to Just the News.
Amid this rampant inflation, Senate Minority Leader Mitch McConnell and President Biden are going across the state of Kentucky to promote their “bipartisan infrastructure” bill that Biden signed in 2021, which totals $1.2 trillion, according to Valiant News.
Copyright 2023, HorizonPost.com