Published 7 hours ago
Fed prepares another mega-sized rate hike, risking deeper economic downturn
Fed could approve another 75-basis point rate hike despite signs of slowing economy
By Megan Henney FOXBusiness
The Federal Reserve is set to escalate its war against inflation this week with another super-sized interest rate hike, risking a deeper recession when the U.S. economy is already slowing.
With inflation unexpectedly accelerating to a fresh 40-year high in June and the job market still growing at a healthy clip, the Fed is under mounting pressure to move more aggressively to tame demand and slow surging consumer prices.
But there are signs the economy is starting to cool off: The number of Americans filing for unemployment benefits has gradually increased, companies have announced layoffs or hiring freezes, and the housing market is softening. Gross domestic product slowed in the first quarter of the year by 1.6%, and is expected to decline again in the second quarter.
Despite that, Fed policymakers remain laser-focused on bringing inflation under control as higher prices prove persistent — even if it triggers a recession. Fed Chairman Jerome Powell told reporters last month that failing to restore price stability would be a "bigger mistake" than crushing growth and causing a downturn.
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https://www.foxbusiness.com/economy/fed-prepares-mega-sized-rate-hike-risking-deeper-economic-downturn
