Federal Reserve Chair Jerome Powell insists he won’t cause a deep recession but that “pain” is necessary to fight inflation.
By Ken Klippenstein, The Intercept
On Thursday, following reports that the Federal Reserve would likely soon jack up the federal interest rate again — this time by 0.75 percentage points — Chair Jerome Powell tried to allay fears that the Fed’s strategy would cause an economic downturn, insisting that another rate hike was unlikely to cause a deep recession.
The interest rate hikes, which nominally serve as a way for the Federal Reserve to tamp down inflation, are also a way to put economic power back in the hands of the very rich by driving up unemployment, since higher interest rates make it more expensive for banks to loan people money, leading to scarcer investment and therefore fewer jobs.
Powell downplayed the effect the Federal Reserve’s moves were likely to have on working people. “We think we can avoid the very high social costs that Paul Volcker and the Fed had to bring into play to get inflation back down,” Powell said, referring to the period in the 1980s when the Fed similarly hiked interest rates and engineered a recession.
Recent Posts
While Trump Cuts Food Aid, ICE Sits on $100 Billion
Take Action Now Five million people have lost food assistance since Donald Trump signed the One Big Beautiful Bill Act. Meanwhile, ICE has received…
It’s Time to Topple the AI Oligarchy
Take Action Now The fight to halt data center construction is gaining steam—and it’s part of a broader effort to make artificial intelligence work…
Elect Democrats—But Should Hakeem Jeffries Be Speaker If He Rejects Medicare for All?
Take Action Now Elect Democrats to stop MAGA, but don’t surrender progressive accountability. Jeffries’ rejection of Medicare-for-All…
‘Zero Aid to Israel,’ Ro Khanna Declares at Democratic National Committee Meeting
Take Action Now “Israel has committed a genocide in Gaza, and we should have the courage to say so,” said the California Democrat.By Jake Johnson,…