The last time the Fed faced a inflation Even today, in the early eighties, Raise interest rates to double digit levels In this process, Caused a deep recession and a significant increase in unemployment.
Thursday, chief US Central BankAnd the Jerome Powelluntil feed it You won’t have to go that far this time.
“We believe we can avoid the very high social costs that Paul Volcker and the Federal Reserve had to put on the line to bring inflation down again,” he said. Powell in an interview in Kato Institutereferring to the then chief feed it In the early 1980s, short-term loan rates were raised to about 19 percent in order to tame extremely high inflation.
Powell also repeat that feed it Determined to bring down inflation, which is now approaching its highest level in four decades 8.5 percentthrough measures such as raising the short-term interest rate, which is in the range 2.25 percent to 2.5 percent.
However, did not comment on what feed it At their next meeting in two weeks. Economists and Wall Street traders are increasingly expecting the central bank to raise its key short-term interest rate by three-quarters of a point for the third time in a row. This will extend the fastest streak of rate increases in days volker.
Reference rate for feed it Affects many loans to Consumers and businesseswhich means that borrowing costs across the economy will likely continue to rise.
The European Central Bank raised its benchmark interest rate by three-quarters of a point on Thursday, the largest increase in its relatively short history, while Europe is also trying to beat record inflation and a faltering economy.