The Federal Reserve announced a 75 basis point increase to interest rates on Wednesday — the largest since 1994 — amid skyrocketing inflation and a U.S. economy showing more signs of the damage caused by Democrats' flawed policies. The decision means that the Fed's benchmark short-term rate for consumer and business loans will increase to a range of 1.5% to 1.75%.
BREAKING: The Fed raises its main interest rate by 75 basis points, the largest increase since 1994 https://t.co/Adr6YZFGGf pic.twitter.com/EHXXZGM50h
— Bloomberg Markets (@markets) June 15, 2022
The Federal Reserve also warned that additional significant rate hikes were likely in the months ahead, another signal that the U.S. may be headed into a forced recession — two consecutive quarters in which the economy contracts — to cope with runaway inflation as the World Bank warns of "stagflation" and JP Morgan CEO Jamie Dimon says an "economic hurricane" is coming.
INTEREST RATE HIKE: Fed hikes interest rates three quarters of a percent, the biggest single jump since 1994. Projects rates will settle around 3.4% by year's end, indicating an aggressive rate increase schedule.
— Richard Escobedo (@RichardEscobedo) June 15, 2022
By raising rates — in something of a front-loading of the rate increases after Fed Chair Jerome Powell previously suggested only a 50 basis point hike for Wednesday's announcement — the Fed is hoping the higher cost to borrow for cars, homes, et al. will slow Americans' spending and shrink the economy.
So, as a result of Biden's agenda, the Fed must now intentionally crash the economy into contraction. After the first quarter showed GDP shrinking, another quarter in which the economy shrinks would put the U.S. in the textbook definition of a recession — all because of a president who promised to "build back better."
The interest rate hike comes amid government attempts to temper inflation that so far haven't eased rising prices' burdening Americans. Consumer inflation has soared to and stayed at four-decade highs while producer inflation sticks close to its all-time record.
In May, the Consumer Price Index blew past consensus estimates to jump one full percentage point month-over-month which put the annual inflation reading at 8.6 percent — the worst CPI report since December 1981. The Producer Price Index — measuring the costs of goods and services upstream from consumers — also beat estimates to rise 0.8 percent in May for a 10.8 percent year-over-year increase.
In addition to the red-hot, runaway inflation that's come as a result of President Biden and congressional Democrats' money-printing and spending-heavy agenda, stocks have been crashing so hard that even the White House was forced to reverse its position earlier in the week to say it is actually closely following markets.
Previously, Biden's press secretary claimed that stocks weren't something the West Wing watched closely, but after any remaining market gains since Biden took office were wiped out — along with Americans' 401Ks — the White House decided to claim the president is "really" aware of stock market woes.