Federal Reserve Chair Jerome Powell had cited the growth of wages and labor costs as a major factor in the decision to raise interest rates to combat the dangerous economic side effects of inflation.
Over the past year, the Federal Reserve had repeatedly increased interest rates in a delicate balancing act designed to continue economic growth and reduce the inflation rate while simultaneously staving off, or even averting altogether, a recession. Interest rates impact borrowing costs for everyone from homebuyers to large businesses looking to raise capital. Lower rates mean more liquidity in the economic system, which can be a contributing factor to inflation.
And The Fed’s efforts appear to get inflation under control appear be working in concert with the ongoing recovery from supply shortages and other pandemic-related economic impacts.have fallen in the United States during the last six months of 2022, from a high of 9.06% in June to 6.454% in December.
Now that wage growth is slowing and inflation is ebbing, it’s believed the Federal Reserve may follow suit and begin reducing future interest rate hikes,It’s expected that the Federal Reserve will vote Wednesday to approve a 0.25% interest rate hike, according to The Hill.
Source: Loan Digest (loandigest.net)
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