1 August 2023
Despite the recent hike, the Federal Reserve’s approach to managing the spiralling inflation crisis appears lackluster and ineffective. In a worrying announcement, Fed Chair Jay Powell projected that inflation won’t hit the targeted 2% until 2025, implying years of potential economic hardship. The vague ‘meeting-by-meeting’ strategy suggested by Powell offers little reassurance, with further rate hikes potentially as early as September. Powell’s reference to the “Volcker Mistake” doesn’t inspire confidence either, hinting at more potential rate hikes under the guise of avoiding past errors.