Federal Reserve Chair Jerome Powell Increases Intrest Rates 0.75%

According to Jerome Powell (Chair of the Federal Reserve), growth and consumer spending have slowed significantly, reflecting lower real income and tighter financial conditions, causing the need for a 75 basis point increase. The housing sector has also become weaker due to higher mortgage rates, and the business investment sector has also seen a decline in the second quarter of 2022. 

Powell also said more substantial hikes going into the fall are possible, and suggested a .75% increase is being considered next meeting.

Jerome added that the labor sector is improving despite challenging economic conditions. Labor demand remains strong, while labor supply has not changed since January.

Powell also said that inflation is well above 2%, the Fed's long-term goal, with total CPI at 6.3% and PCE (Personal Consumption Expenditures) price at 4.7%. In June, the CPI was higher than expected, at 9.1%, with a core CPI change of 5.9%. 

According to Powell, the overall price increases and upward inflation pressure were caused by the rise in prices for commodities such as crude oil. This has resulted in a spiral surge in gasoline, food, and other goods or services.

Author: Garrett Meifert

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