(RightWing.org) – America continues struggling with inflation and supply side issues accompanying Joe Biden’s rise to the nation’s highest office. The Federal Reserve’s Open Market Committee (FOMC) recently predicted a mild recession by the end of 2023 in the wake of “subdued” GDP growth accompanied by a “softening in the labor market.” Meanwhile, Chairman of the Fed Jerome Powell recently indicated that more interest rate hikes are coming.
On June 21, Powell delivered the Fed’s semiannual Monetary Policy Report to the House Financial Services Committee. He also provided testimony and answered questions from lawmakers. He confirmed that the “US economy slowed significantly” last year, noting that “slower output growth” continues to weigh heavily on “business fixed investment.”
Additionally, the “labor market remains… tight,” with a “demand” that “substantially exceeds the supply of available workers.” He also warned that inflation remains high — “well above” the Fed’s “longer-run goal of 2%.”
— Chris 🇺🇸 (@Chris_1791) June 21, 2023
Turning his attention to monetary policy, Powell reminded lawmakers that the FOMC had raised interest rates by five percentage points since early 2022. He explained that the committee decided the week of June 12 to maintain federal funds at the current target rate of 5% to 5.25%. However, he warned lawmakers that “all FOMC participants” expect that it would be necessary to raise interest rates “somewhat further” by year’s end.
Powell concluded his remarks by stating that the members of the Fed understand that their decisions impact “communities, families, and businesses” nationwide. He vowed that members would do everything possible to achieve its “maximum employment and price stability goals.”
Today the @FinancialCmte held its semi-annual hearing with @federalreserve Chairman Jerome Powell. I asked Chairman Powell about the impact of the Fed’s policies on inflation and on our economy. The Fed must not pursue policies that will worsen the burdens Americans are facing. pic.twitter.com/CPMRLXCF2W
— Congressman Mike Lawler (@RepMikeLawler) June 21, 2023
Rep. Mike Lawler (R-NY) grilled Powell about the impact of the Fed’s policies on homeowners. He pointed out that in January 2021, 30-year fixed-rate mortgages had an interest rate of only 2.77%. Currently, loan holders are looking at a rate of 6.69%. That increase means that owners of a median-price home are paying roughly $300,000 more over the duration of the loan, or about $10,000 a year out of pocket.
Likewise, Committee Chairman Patrick McHenry (R-SC) addressed his concerns regarding the Fed’s impact on working-class Americans. Characterizing rising interest rates as a “stealth tax on American workers and families,” he urged Powel to remain committed to keeping interest rates low. He also warned him not to cave to pressure from leftists who want the Fed to help fund its spending sprees.
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