The FED has announced a rate hike of 0.5%.
This will raise the Federal Funds Rate to a target range of 0.75% and 1%.
Apparently, in a press conference, Jerome Powell, the FED chairman said “Inflation is much too high. We’re moving expeditiously to bring it back down.”
I saw a headline in CNBC which read “FED raises rates by half a percentage point - the biggest hike in two decades – to fight inflation.”
There are two things I wish to say about what I have just mentioned.
Firstly, the headline and Powell’s statement made me emit a contemptuous chuckle. The FED has no intention whatsoever of tackling inflation. If it were serious about tackling inflation, then it would raise interest rates to above the level of inflation and keep them there until the economy has recovered. According to official figures inflation is running at 8.5% in the US. Let’s take that as factual, so interest rates should be at least 9%, if not in the double digits.
But obviously the FED can’t raise rates to these levels. Why not? Well because the FED is in a bit of a bind. If it raises rates to tackle inflation, then it will cause an almighty crash and a recession, or probably something worse.
If it doesn’t raise rates much higher than present levels, then inflation will not only continue, but will in all likelihood get worse.
So the FED is damned if it does and damned if it doesn’t.
But this is not the extent of it. Truth be told, if it raises rates even to say 3% or 4%, then this will cause a crash and a recession. I’ve done a couple of videos previously on the topic of interest rates for anyone who wants a more in depth account.
Anyway, be advised, this a problem of its own creation. The situation facing the FED in the US a direct result of its policies of exceptionally low interest rates for the past however long. So, the FED has only itself to blame. What is more, it’s not just the FED. Most other Central Banks have pursued the same monetary policies.
Unfortunately, it will be the ordinary people of the world that will suffer the consequences.
Secondly, I want to say something about the headline and the reporting in the MSM. I don’t want to rant, so I will keep this short.
I find reporting such as this utterly repugnant. It is the job of the media to hold Governments and others in positions of power to account. They do not do this, but instead back up the Government and their cronies. To my way of thinking, what they put out is tantamount to propaganda.
Unfortunately, it’s left to people like me in the Alternative Media, the Fifth Estate, to do the job that they should be doing. And, moreover, I don’t get paid for doing this whereas they do.
Wise up and rise up.
