Federal Reserve Is Preparing To Light The Match

Federal Reserve Raises Interest Rates Again

Federal Reserve Raises Interest Rates Again

(AmericanProsperity.com) – Americans who are already struggling to make ends meet will need to tighten their belts a little more. The Federal Reserve announced yet another interest hike in a move experts insist is necessary to rein in inflation. The increase marks a trend that’s unlikely to reverse anytime soon.

For the third time in a row, the Federal Reserve has raised interest by three-quarters of a percentage point, or 75 basis points. The move is in response to continued hikes in overall expenses. The nation’s core inflation rate rose from 5.9% to 6.3% between July and August. While the overall annual percentage rate for inflation dropped a little, prices for food, rent and energy have continued to climb.

To analyze how much inflation has pummeled the US economy, consider the difference in buying power between now and before the pandemic. According to the US Bureau of Labor Statistics, an item that would have cost $10 in 2019 costs American consumers $11.77 today. While $0.18 on every dollar might not look like much, it adds up quickly for higher-priced items. And the problem is likely to persist, and potentially worsen, for at least another year.

Experts blame spending and production growth, also noting unemployment has been low. They point to the influx of money from pandemic stimulus packages as responsible for much of the economic damage, even though US citizens haven’t seen any relief checks since March 2021.

Ultimately, supply and demand dictate US prices. Considering domestic corporate profits rose 9.1% in 2022, reflecting an all-time high throughout the history of the country, perhaps the solution lies in a round of corporate audits instead of another interest rate hike.

~Here’s to Your Prosperity!

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