Powell vows no surrender in inflation battle as Fed jacks up rates by 75bps



by   |  VIEW 334

Powell vows no surrender in inflation battle as Fed jacks up rates by 75bps

Amid conflicting narratives on whether the US Federal Reserve’s gamble on an aggressive rate-hike cycle to tame a teetering inflation-surge would pay off, the US Federal Reserve had raised its overnight lending cost by 75bps (basis percentage point) again on Wednesday, marking off the speediest rate-hike cycle since 1981s, reflecting towards a sustenance in economic weakness alongside a slandering slowdown in job market.

On top of that, followed by the US Fed decision released late on Wednesday, Fed Chair Powell was quoted saying that the Central Bank’s key goal is to downsize inflation even in expense of a persistently threadbare economic profile in the US.

Nonetheless, as worries over a US recession are mounting at a breakneck pace, Fed’s Powell had nullified the issue saying the economy had continued to hire over 350,000 additional workers each month. Ironically, data released late on Thursday had unveiled that the US economy had unprecedentedly contracted by 0.9 per cent on Q2, 2022, marking off a contraction for the second straight quarter in a row.

Fed’s Powell fends off rate-hike as recession risk looms large

Besides, speaking with the reporters following the US Central Bank’s two-day long policy meet, Powell stressed that the US economy is not currently in a recession adding, “It doesn't make sense that the U.S.

would be in recession”. However, Fed’s Powell had fended off his vague optimism about a short-lived supply chain crisis more than half a year back in 2021s, which has still been pouring scorn on US economy. Nevertheless, Fed’s Powell had told that a recession would not be necessary to bring down the latest upsurge in inflation indicators, though a consumer price index close to a double-digit figure should begin to take a greater toll on both the US Federal Reserve alongside an incumbent Biden Administration ahead of an all-critical congressional election in November with Joe Biden’s popularity hitting an all-time low of 25 per cent.