[guest post by JVW]
Following-up an earlier post, Fed nominee Sarah Bloom Raskin took her name out of contention yesterday in order to allow the other four nominees, including the re-nomination of Fed Chairman Jerome Powell to serve another term, to go forward with a vote. With that bit of political drama out of the way, the Fed can now openly come to grips with the whole “inflation is transitory” line of bullcrap that they and the Biden White House were peddling last spring. So here we go:
The Federal Reserve announced on Wednesday that it will raise interests rates by a quarter of a percentage point, hiking rates for the first time since December 2018 in an effort to curb rising inflation.
Following their March meeting, Fed officials said in a statement that the Federal Open Market Committee would raise the benchmark federal funds rate in order to cool an overheated economy, bringing the rate to between .25 and .5 percent.
“With appropriate firming in the stance of monetary policy, the committee expects inflation to return to its 2 percent objective and the labor market to remain strong,” the Fed said in its March statement, adding that the committee “anticipates that ongoing increases in the target range will be appropriate.”
“Appropriate firming in the stance of monetary policy” has to be this month’s best euphemism. The slick phrase was released in a statement, so there was no chance to pose questions to the Fed governors, but it would have been lots of fun to ask them their disposition on further spending initiatives by the Biden Administration and Congress in the name of “building back better” or whatever focus-grouped tag they place upon it.
Today’s Consumer Price Index is nearly eight percent higher than it was one year ago, and in an election year even Democrats have to start sweating this out. I don’t want to jinx it by making a bold prediction, but here’s hoping that the Biden/Pelosi/Schumer axis and their assorted mob is forced into some small mode of fiscal responsibility for the remainder of the year.