Republicans and Democrats on Capitol Hill are expected to skewer Federal Reserve Chairman Jerome Powell this week over the hottest inflation in four decades.
Wall Street Journal Editorial board member Kim Strassel and Rightforge founding partner Christopher Bedford discuss the U.S.’s mounting inflation issue and the fed ordering largest rate hike in 28 years on ‘WSJ at Large.’
The hearings come as the Fed takes the most aggressive action in decades to cool the economy and bring down, which was another shocker in May at 8.6% – the highest since December 1981. Policymakers last week approved a 75-basis point interest rate hike, the first of its kind since 1994, and signaled that another increase of that magnitude is on the table at their July meeting.
Republicans are expected to pummel Powell – who just one year ago classified inflation as transitory and likely to subside soon – for misjudging the price spike and urge him to tighten monetary policy further by raising rates higher and speeding up the reduction of the Fed's $8.9 trillion balance sheet, a Senate Banking Committee Republican aide told FOX Business.
Democrats, meanwhile, plan to press Powell on putting workers first, even as the Fed tries to tame consumer demand and bring inflation closer to its 2% target. Hiking interest rates tends to create higher rates on consumer and business loans, which slows the economy by forcing employers to cut back on spending.are already approaching 6%, the highest since 2008, while some credit card issuers have ratcheted up their rates to 20%.
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