Politics
Jerome Powell Asks Working Americans To Please Stop Affording Things So Quickly
By Mor Michael, . BSN Network. Satire.
The Federal Reserve is expected to raise its benchmark interest rate at next week's policy meeting, according to new inflation data released Tuesday, which showed that prices remain stubbornly elevated despite the fact that a war is actively happening and most Americans are already doing their level best not to spend money on anything enjoyable.
The move would represent the Fed's most direct response yet to what economists are calling "persistent core inflation" and what everyone else is calling "I cannot believe what eggs cost now."
Jerome Powell, who has the kind of face that suggests he has never once checked a price before putting something in a cart, addressed reporters from the Fed's marble headquarters in Washington, which was built at a time when marble was considered an appropriate use of public money.
"The labor market remains resilient and consumer spending has held up better than anticipated," Powell said, in the tone of a man describing a pest problem. "We believe further adjustment to the policy rate is warranted to ensure inflation returns to our two percent target over the medium term." He did not specify what the medium term means, what it costs, or whether it will be affected by the war.
The rate hike, if approved, would raise borrowing costs across the economy, meaning higher credit card interest, higher auto loan payments, and higher mortgage rates for anyone still operating under the impression that homeownership is a thing that can happen to them. The Fed considers this progress.
The inflation that prompted this decision is itself partly a product of the Iran conflict, which began disrupting oil markets in February and has since spread into shipping lanes, supply chains, and the general psychological condition of anyone who drives to work. The war, notably, was not put to a public vote before it began raising the price of everything.
Sen. Elizabeth Warren, who has opposed Powell's rate strategy since before it was fashionable to do so, called the anticipated hike "the wrong medicine for the wrong diagnosis at the wrong time," which is a phrase she has now used in enough press releases that her office appears to have it set as a keyboard shortcut.
"Raising rates will not lower the price of oil," Warren said. "It will not end the war. It will not make groceries cheaper. What it will do is make it harder for working families to get a loan, buy a home, or keep a small business afloat." She then called for oversight hearings, which the relevant committee will schedule for a date after the damage is already done.
At a Kroger in Columbus, Ohio, a woman named Debra Simmons stood in the dairy aisle for what she described as "longer than I'm comfortable admitting" before deciding against a block of Gruyere she had no intention of buying in the first place.
"I just wanted to see if I could," she said. "I could not."
The Fed's position, reduced to its operational logic, is that when prices rise because of a war and a supply shock and three years of accumulated financial stress, the correct response is to make it more expensive for people to borrow the money they are already struggling to repay. The Fed would like to clarify that this is not a punishment. It is a tool.
Powell is expected to hold a press conference following next week's decision, during which he will take questions and answer different ones.
Debra put the Gruyere back.
The story we are making fun of: https://thehill.com/newsletters/business-economy/6085552-stubborn-inflation-fed-rate-hike/