February 1, 2023
You probably know by now the Federal Reserve increased interest rates by 0.25%. Bringing the interest rate to between 4.5% and 4.75%.
In case you didn’t know the Federal Reserve Chair makes a statement after every meeting and the markets hang on every single word. But for lots of us, his words are really confusing. So I figured I would help make some sense of them.
By increasing interest rates today by 0.25% instead of the really aggressive 0.5% or 0.75% rate increases like we did last year we’re buying ourselves some time to see how these higher interest rates work their way into the economy. We need to see whether this is enough to get inflation back down to 2% instead of 6.5%.
We don’t know for sure how much higher interest rates have to go to get inflation to 2%. We’re going to look at a bunch of data and make a decision at our next meeting in march
Yeah we know we’ve been crushing you with these interest rates. But y’all are spending and we need to get that spending to come down in line with the goods, services and houses we have available.
Come hell or highwater we are getting this inflation down. Because we know – like Lisa told you in this video – if we don’t – this crazy high inflation won’t go away and that doesn’t work for anyone.
We know the things we have to do to get inflation down is going to cost you some jobs and going to slow down the us economy.
Too bad too sad. We gotta do it. So in the end we can have prices come down and be stable. And have maximum employment at the same time.
We’ve screwed up in the past. We cut interest rates too soon and inflation shot right back up and we had to start all over again. It was bad — so we’re not doing that again.
Remember how we said last year that the interest rate in 2023 was probably going to end up somewhere between 5% and 5.5%? Well we’re already at 4.5% and 4.74% and we’re not sure if 5%’s enough or when we’re going to be able to start cutting rates. But as soon as we know…we’ll let you know.
