Progressive economists and otherOn Wednesday, critics criticized the U.S. Federal Reserve’s official behavior. announcingThe widely expected third 75 basis-point increase in interest rates this year is now.
While addressing the decision during an afternoon press conference, Fed Chair Jerome Powell also said that “we anticipate that ongoing increases will be appropriate” to meet the central bank’s goal of returning inflation to 2%.
With each rate hike — and other central banks following suit — warnings of a global recession have mounted, and opponents of the Fed’s approach have stressed that low-income workers and other marginalized people are bound to bear the brunt of the negative impacts.
“It’s a central bank in full recession-creating mode,” Crooked Media Brian Beutler is editor in Chief said Wednesday was Wednesday after the Federal Reserve raised its rate to a range between 3% and 3.25%.
U.S. Sen. Elizabeth Warren (D-Mass.Senator Elizabeth Warren (D.Mass. ), who was a vocal critic of previous hikes was among those who focused The expected effects on those who cannot afford an additional rate increase.
“Chair Powell just announced another extreme interest rate hike while forecasting higher unemployment,” she said Wednesday. “I’ve been warning that Chair Powell’s Fed would throw millions of Americans out of work — and I fear he’s already on the path to doing so.”
Janelle Jones, chief economist of the Service Employees International Union, (SEIU), is similar. said that “today the Fed decided to risk mass joblessness in its fight against inflation. Raising interest rates, and pushing the economy toward a recession, will result in millions of workers being unemployed or taking pay cuts.”
“And we know who those workers will be,” she continued. “The workers most likely to face an economic crisis are workers of color, women, and low-wage workers. The same groups who already face worse economic outcomes in the labor market.”
Black unemployment rates of 8.8% will likely rise to 4.4% next years as a result of rising unemployment. We don’t have to make this choice for Black workers. https://t.co/RvoLGAA9aM
— Janelle Jones (@janellecj) September 21, 2022
In addition to also emphasizing that “raising interest rates puts the burden of fighting inflation on low-wage workers,” former U.S. Labor Secretary Robert Reich suggested that “for once, let’s take aim at an actual driver of inflation: corporate profits.”
Specifically, Reich — now a professor of public policy at the University of California, Berkeley — advocated for a windfall profits tax, price controls, higher taxes on corporations and the rich, and reining in monopoly power.
Noting another tweet from Reich with those same messages, Groundwork Collaborative argued Wednesday that he is “exactly right” that the Fed’s recent moves largely burden lower-wage people and “corporate profits must be the target, not workers.”
.@RBReichThis is exactly what you need to know. To add additional context, Black workers will be especially burdened by a Fed-induced recession — since their unemployment rate is roughly double that of white workers.
Corporate profits should be the goal, not workers. https://t.co/zhTsOfJElr
— Groundwork Collaborative (@Groundwork) September 21, 2022
“You can’t fix the economy by hurting people — but that’s exactly what the Fed chose today,” Groundwork Collaborative added. “Throwing millions out of work won’t address the root causes of inflation and we implore policymakers to remember that #WeAreTheEconomy — not Wall Street and wealthy corporations.”
Rakeen Mabud (CEO and managing director of policy & research at Groundwork Collaborative) and Reich are two of the experts. scheduled Thursday morning testimony before the House Committee on Oversight and Reform
The Subcommittee on Economic and Consumer Policy hearing — titled, “Power and Profiteering: How Certain Industries Hiked Prices, Fleeced Consumers, and Drove Inflation” — is set to highlight that while input costs have begun to fall, some companies and sectors “are keeping prices higher anyway, prolonging inflationary pressures that have harmed American consumers.”