Inflation has become one of the largest issues of the past year. With hundreds of millions of Americans dealing with the increase in prices in everything across the board. In reaction to this, little has been realistically done. In fact, every time things are getting better, another variable comes into play – pushing inflation rates even higher. Jerome Powell, Chairman of the Federal Reserve has been making plans to tackle this inflation. Powell himself has said: “It is appropriate in my view to be moving a little more quickly” and “there is something to be said for front-end loading any accommodation one thinks is appropriate. … I would say 50 basis points will be on the table for the May meeting”. What this means is that in order to tackle inflation, Powell is seeking to lower rates.
This plan marks a major shift in the Federal Reserve’s direction and plans. In fact, back in 2020 the Fed encouraged temporary inflation and accepted it as a short-term consequence to the long-term benefit of boosting employment rates. Unfortunately, the Feds expectation for inflation to simply be “transitory” and something that would clear up after the pandemic and supply chain issues cleared up was only wishful thinking – failing to come into fruition. Looking ahead the fed will be increasing interest rates and reducing the amount of bonds it is holding. What do you think about the feds moves? And will they help reduce inflation?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.