After a meeting of the Federal Open Market Committee led by Chairman Jerome Powell on Wednesday, the Federal Reserve raised interest rates by 75 basis points. The decision its “the single largest increase in nearly thirty yeas as inflation soars” writes National Review.
The group announced it intends to bring the rate to a range of 1.5 percent to 1.75 percent in the short-term. “Of the eight-member committee, seven voted in favor of the hike while one member, Esther George, President of the Federal Reserve Bank of Kansas City, voted against the increase, preferring that it be 0.5 percent instead.”
The hike represents the largest since 1994, when then-Chairman Alan Greenspan “led a similar increase in anticipation of high inflation during an economic recovery.” Inflation too has reached record highs, hitting its peak level since 1982, currently at 8.6 percent, according to the latest federal Consumer Price Index report (CPI).
Powell is in his second term after President Biden re-nominated him to the chairman’s post. Powell has said the Federal Reserve would do “whatever it takes” to curb inflation. However, the move will likely have detrimental implications for individual borrowing and will “likely lead to higher interest rates on loans of consumers and businesses.”
8.6 percent “is a figure for which the Biden Administration has received considerable criticism, with its policy actions – i.e., the nearly $2 Trillion American Rescue Plan’s Covid relief spending and ongoing efforts to transition U.S. energy supply away from fossil fuels – being directly cited as exerting demand-pull effects on consumer prices” reports National Review.
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Biden spends $1.65 trillion taxpayer dollars while vacationing in St. Croix
While vacationing in the island of St. Croix for the holidays, President Joe Biden on Thursday signed into law the massive $1.65 omnibus spending package.
The whopping 4,155 pages was supported by only nine House Republicans and 13 Senate Republicans. Majority of criticism from the GOP includes concerns that the bill was rushed and crammed with wasteful spending by a lame-duck Democratic-dominated Congress. The recourse will punish American families by adding to the national debt and exacerbate inflation.
“Today, I signed the bipartisan omnibus bill, ending a year of historic progress. It’ll invest in medical research, safety, veteran health care, disaster recovery, VAWA funding — and gets crucial assistance to Ukraine,” Biden tweeted. “Looking forward to more in 2023.”
Senate minority leader Mitch McConnell “praised the bill on the grounds that it represents a real decrease in discretionary spending. He presented it as a positive that nondefense spending jumped by only 5.5 percent, from $730 billion to $772.5 billion, amid an inflation rate of 7.1 percent” writes National Review.
“The bipartisan government-funding bill that Senators Shelby and Leahy have finished negotiating does exactly the opposite of what the Biden administration first proposed,” he said. “This bill provides a substantial real-dollar increase to the defense baseline . . . and a substantial real-dollar cut to the non-defense, non-veterans baseline,” McConnell insisted as negotiations were wrapping up.
House minority leader Kevin McCarthy, however, stated his strong disapproval of the bill before it even advanced. Affirming a letter from 13 House Republicans, McCarthy demanded the bill is reckless, irresponsible, and a “purposeful refusal to secure and defend our borders.”
For example, it failed to incorporate protections for Title 42, the pandemic policy that allows illegal immigrants to be expelled on a public-health basis, which currently hangs in the balance at the Supreme Court.
National Review adds, “The funding in the bill, which averted a federal government shutdown before the new year, includes an allocation of $45 billion in defense assistance to Ukraine. Some Republican priorities, such as Electoral Count Act reform and a bigger military budget, were nested in with Democratic appropriations, such as increased funding for Medicaid and food stamps.”
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