(PatrioticPost.com)- Last Wednesday, the Federal Reserve enacted another 0.75 percentage point interest rate increase as it continues to try and tamp down runaway inflation.
This is the second consecutive 0.75 percent rate hike and the fourth rate hike so far this year.
With the price of goods and services climbing to the highest level in four decades, the Fed is hoping to reduce demand and in turn, slow down price growth.
In a statement released after its two-day meeting last week, the Fed said there are signs the previous rate increases are working as recent spending and production indicators have softened.
What remains unclear, however, is whether the Fed will succeed in accomplishing the balancing act of slowing price growth while avoiding broader economic damage, including sending the economy into recession.
The day after the Fed raised rates, the Bureau of Labor Statistics released its latest GDP figures which showed that the US economy had a second consecutive quarter with negative growth.
Two consecutive negative-growth quarters is the technical definition of recession.
The Biden administration, desperate to avoid the optics of overseeing a recession, spent last week furiously attempting to spin the narrative that two consecutive negative-growth quarters alone did not mean that the economy is in a recession.
Naturally, the American corporate media joined in, defending the White House’s redefinition of recession and arguing that two negative quarters only meant the economy may be heading for a recession.
However, according to Chris Williamson, the chief business economist at S&P Global Market Intelligence, excluding the pandemic lockdowns, US output is falling at a rate not seen since 2009.
Williams said US manufacturing has stalled and the post-pandemic rebound in the service sector “has gone into reverse” now that the pent-up demand has dwindled due to the rising cost of living, higher interest rates, and declining consumer confidence.