Louisiana Republican senator John Kennedy recently said in an interview that the US Federal Reserve may need to increase the federal funds rate from its current level to 8-10% in order to control inflation. Furthermore, Kennedy criticized the Biden administration for their decision back in mid-March to help two banks: Silicon Valley Bank and Signature Bank, by compensating all their depositors – even though he said this was actually a bail out.
Kennedy Presses Biden and McCarthy
Recently, Senator John Kennedy from Louisiana said that the government’s central bank needs to increase its interest rate (also known as the “benchmark rate”) from 5% to around 8-10% in order to control rising prices (inflation). He also suggested that Federal Reserve chairperson Jerome Powell will need to raise this rate much higher than usual unless Congress slows down its extra spending (stimulus spending).
On the same day that senator John Kennedy spoke, the U.S. Federal Reserve raised the interest rate for banks by 25 points. This was their tenth consecutive hike and brought the rate up to its highest point in 16 years.
President Biden and House Speaker Kevin McCarthy need to make difficult decisions about how money should be spent in order for the government to have enough resources. Senator Kennedy believes it’s time for the grown-ups to have a serious discussion about this issue. Kennedy went on to say, “We can’t do it without cutting down spending and debt.”
Senator John Kennedy’s Worrisome Warnings on Banking System
Senator John Kennedy was worried about the U.S. banking system and how current technology makes it easier for small issues to become pretty big problems. He said that banks now trust each other more, meaning they are less safe than before. Kennedy even pointed out that modern financial institutions sort of act like Ponzi schemes, which are a type of scam.
Kennedy said “these things are like sophisticated Ponzi schemes”.
U.S. Treasury secretary Janet Yellen recently warned that the United States might default on its debt in June. This could cause major economic and financial problems since the U.S. has unreasonably huge amounts of debt, which is currently estimated to be $31 trillion.
Republicans won’t let the government borrow more money to pay its debts unless they take away certain rules on green energy and climate change from the Inflation Reduction Act. Senator John Kennedy recently commented on this due to his unhappiness with President Biden’s actions when two banks, Silicon Valley Bank and Signature Bank, went bankrupt in March.
Do you like what Senator Kennedy said? Do you agree with his thoughts? Tell us your opinion down in the comments box.
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