The Intelligence from The Economist Powell to the people: The Fed raises rates
Jun 16, 2022
Simon Rabinovich, U.S. economics editor, dives into the Federal Reserve's significant rate hike and its potential effects on inflation and recession. Shashank Joshi, defense editor, questions the obsolescence of tanks in modern warfare, highlighting vulnerabilities exposed by advanced anti-tank technology. Claire McHugh, culture writer, explores the powerful war anthems from Ukraine, showcasing their cultural significance and how they reflect the resilience of its musicians in the face of adversity.
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Fed's Rate Hike
- The Federal Reserve raised interest rates by 0.75%, the largest increase since 1994.
- They aim to combat inflation without causing a recession.
Surprise Rate Hike
- The Fed's rate increase surprised markets, exceeding the expected half a percentage point.
- Inflation reports revealed stronger than anticipated price pressures, prompting the change.
Concerning Inflation
- May's consumer price index showed the fastest annual inflation rate since 1981 (8.6%).
- Month-on-month price acceleration is alarming, exceeding the Fed's hopes for moderation.