Federal Reserve Chair Jerome Powell told lawmakers Wednesday that rate hikes will not bring down oil and food prices, despite their contributing the lion's share of recent inflation gains.That was just over a month ago, when the Fed did its first massive rate increase. Both Powell and the Right Wingnuts he kowtows to treat the current state of inflation as specific, and limited to, Sleepy Joe and the USofA, when, in fact, the developed world is all in a pickle.
In an exchange with Sen. Elizabeth Warren (D-Mass.), Powell was blunt in saying that the Fed's efforts to tamp down on higher prices with higher interest rates will not impact either category.
"Chair Powell, will gas prices go down as a result of your interest rate increase?" she asked.
"I would not think so, no," he replied.
Then Warren asked, "Will the Fed's interest rate increases bring food prices down for families?"
Powell said, "I wouldn't say so, no."
He nonetheless stressed that the Fed was equipped to tackle inflation more broadly.
"We have both the tools we need and the resolve it will take to restore price stability on behalf of American families and businesses," he said, during his semiannual testimony to Congress.
But the U.S. is hardly the only place where people are experiencing inflationary whiplash. A Pew Research Center analysis of data from 44 advanced economies finds that, in nearly all of them, consumer prices have risen substantially since pre-pandemic times.It's, mostly, a supply side issue (where's Laffer when it's this funny?): Russia, Ukraine, China chief amongst them. It is also true that consumers held back about $2.4 trillion in spending over the course of the pandemic. That's a good slug of moolah to unleash on wary producers, too. Producers chose to recoup lost profits all at once, and we got inflation.
All Powell is going to do is what Right Wingnuts always do before an election: stab Democrats in the back with a recession.
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