US Fed: High Interest Rates Likely ‘For Some Time’
In an opening speech at the annual Jackson Hole Economic Symposium in Wyoming on Friday, Federal Reserve (Fed) chairman Jerome Powell signaled that the US central bank is expected to keep raising interest rates and that they're likely to remain high for "some time."
Facts
- In an opening speech at the annual Jackson Hole Economic Symposium in Wyoming on Friday, Federal Reserve (Fed) chairman Jerome Powell signaled that the US central bank is expected to keep raising interest rates and that they're likely to remain high for "some time."
- The annual gathering is a conference featuring central bankers from around the world that consists of a sequence of papers on economic ideas related to the year's topic, with this year's being "Reassessing Constraints on the Economy and Policy."
- Arguing that the "historical record cautions strongly against prematurely loosening policy," Powell stated that restoring inflation to 2% was the central bank's "overarching focus right now."
- While Powell admitted that the decision will bring "some pain" to households and businesses, he noted that "a failure to restore price stability would mean far greater pain."
- In reaction to Powell's speech, Friday's close saw the Dow Jones Industrial Average drop by 3%, the Nasdaq composite end the day 3.9% lower and the S&P 500 lose 3.4%.
- The Fed has already raised interest rates by 2.25% since March and the Fed's projections show that rates are expected to stay elevated until at least the end of next year.
Sources: BBC News, Axios, Al Jazeera, Reuters, PBS News Hour, and NPR Online News.
Narratives
- Establishment-critical narrative, as provided by Common Dreams. Bringing down prices must be a top priority for the Fed, but the standard approach of aggressive interest rate hikes is a cruel method that's only making life harder for Americans who are feeling the pressure. With a recession on the horizon, the Fed's so-called solution is seemingly worse than the problem.
- Pro-establishment narrative, as provided by Banking Dive. It's clear that there are tough times ahead, but we have to prioritize long-term health over short-term gains. While the process of bringing down inflation is painful, the alternative is far worse. Under The Fed's guidance, there's hope that this will be resolved as swiftly as possible.
