Article Image

IPFS News Link • Ron Paul Says...

Federal Reserve's Rate Increases: Too Little Too Late?

• Ron Paul Institute - Ron Paul

This increase is a sign that the Fed has finally realized that price inflation is more persistent and widespread than the Fed initially believed.

Stocks have fallen much lately. This is in part because of fears rate hikes will push the economy into recession. The Fed itself seems to believe that the economy is going to slow down in the near future, as it has reduced its projection of 2.2 percent economic growth in 2022 to 1.7 percent. Even more ominously, the Atlanta Fed's GDP tracker fell to zero for the second quarter of 2022, due in part to May's weak retail sales.

The Fed claims it will reduce inflation without significantly increasing unemployment or causing a recession. This is likely to be as accurate as the Fed's prediction that inflation was "transitory."

This latest rate increase will only raise rates to where they were before the lockdowns led the Fed to embark on a historic money-creating spree. The Federal Reserve cannot increase rates to anywhere near the level they would be in a free market because doing so would increase interest payments to unsustainable levels for debt-ridden consumers, businesses, and the federal government.


Free Talk Live