Economics experts warned against increasing interest rates too quickly, but yesterday the Federal Open Markets Committee (FOMC), the Federal Reserve body that determined interest rates, raised it for the sixth time in eight months. The FOMC announced a 75 basis points interest rate hike.
But economic experts said that doing so would cause a recession and as many as 3.2 million people could lose their jobs by the end of 2023 resulting in 5.6 percent unemployment, Vox reported.
“It is inexcusable, bordering on dangerous for the Fed to be raising rates so aggressively,” Claudia Sahm, former Federal Reserve economist and Council of Economic Advisers senior economist, said.
According to a new analysis from Accountable.US, economists warned that increasing interest rates too quickly was “a very dangerous approach,” could make inflation worse and cause “great pain” without addressing real economic issues.
“A chorus of economic experts have warned hiking interest rates again is a recipe for millions of Americans receiving pink slips, yet the Fed has decided to triple down on what is not working,” Liz Zelnick, spokesperson for Accountable.US, said. “Throughout the pandemic, the Fed should have been acting as stewards of the fragile economic recovery, but instead have prioritized demands from big banks, hedge funds and other Wall Street special interests at the great expense of average working families. If excessive interest rate hikes hasten the arrival of an otherwise avoidable recession, will the Fed take responsibility—or try to pass the buck as they keep making matters worse?”