Carlos Fernandes Steve Forbes, who runs the company Forbes Media, is not happy about the Federal Reserve. He believes that it’s causing damage to the United States by making interest rates go up quickly. He also thinks that economists are making a big mistake in their approach to things.
Steve Forbes, the boss of Forbes Media, said on Thursday that the Federal Reserve is making bad decisions that are having negative effects on America’s economy. Someone called Jerome Powell from the Fed told a Senate committee about this situation.
Jerome Powell, who runs the Federal Reserve, said something at a Senate hearing Tuesday that made people upset because it meant there might be higher interest rates than anyone expected. He suggested this because the US economy has been doing even better than anybody thought it would – so higher rates may help slow it down a bit.
Central bankers and most economists believe that when the economy is doing well, inflation will happen. That’s why they try to slow down the economy as a way of stopping inflation. However, they don’t realize that inflation actually happens when there is too much money created – in other words, when the currency loses its value. As Forbes chairman puts it, this is what inflation really means.
When bad things like natural disasters, wars, Covid lockdowns or taxes that hurt the economy are happening, raising interest rates will not make them better. The Fed is causing people to suffer more than is necessary.
At the congressional hearing on Tuesday, Powell said that inflation has gone down recently but it’s still high compared to what the Federal Open Market Committee wants (2%). To make sure inflation goes back down to the 2% target, Powell believes that increasing interest rates is necessary.
Some people who work for the Federal Reserve (or Fed) are saying that the interest rates need to be higher to help stop prices from going too high. A Bank of America expert suggested last week that this could hurt people’s ability to spend money on things they want. The chief of the Atlanta branch of the Fed also noted how a mistake in policy would bring dangerous effects. Finally, one economist mentioned that if the Fed doesn’t reach its goals then the economy would suffer greatly.
What do you think about Steve Forbes’ opinion that the Federal Reserve is making it difficult on the American economy by raising interest rates? Let us know in the comments section below.
