The alarm of American economists about the continuation of inflation and economic recession

According to IRNA’s report on Tuesday, the Financial Times newspaper wrote: Federal Reserve Chairman Jerome Powell made it clear at the last meeting of the US central bank officials to formulate the country’s financial policies that the recession in the world’s largest economy is not an issue that can be ignored. .

He told a news conference after the Federal Open Market Committee meeting in September that no one knows whether this trend will lead to a recession and, if so, how significant it will be.

According to this report, at the same time as the Federal Reserve meeting this week, the inflation rate in the United States is also at the highest level that has not been seen in the past few decades, and American politicians are trying to manage it quickly. They are looking for a 0.75% increase in interest rates for the fourth consecutive round and have more stringent policies ahead. According to economists, this means more recession.

Since the last Fed meeting, there have been signs that the housing market is weakening as consumer demand declines, but new inflation data shows that price pressures continue and labor costs are higher.

According to this report, inflation in the United States has spread from industries that were disrupted due to supply chain disruptions related to the Corona epidemic and the war in Ukraine to service sectors.

Another 0.75 percent increase in U.S. interest rates this week brings the Federal Reserve a step closer to its new target of a 3.75 to 4 percent rate hike, which policymakers think will have the biggest impact on activity. It will be economical.

The Federal Reserve said last summer that it would have to slow the pace of interest rate hikes “at some point.” The announcement fueled the belief that the central bank has lost its will to fight inflation and may start cutting interest rates next year. This reinvigorated the markets and undermined some of the measures the central bank had taken in tougher financial conditions.

The Financial Times further quoted an American economist and wrote that the Federal Reserve should, on the one hand, adjust the rate of interest rate hikes and examine how another huge increase in interest rates would affect the real economy and financial stability. slow The government can also, on the other hand, take a hit in its credibility in the fight against inflation.

According to this publication, the adjustment in the pace of tightening inflationary policies is welcome news for some Senate Democrats, who have recently increased criticism of the Federal Reserve and warned of excessive job losses in the future.

But at least for now, it seems that policymakers are more concerned about shortfalls in this matter than they are worried about more measures to fight inflation.