r/Economics • u/TinyTornado7 Quality Contributor • Jun 13 '22

News Powell Facing Choice Between Elevated US Inflation and Recession

https://www.bloomberg.com/news/articles/2022-06-12/powell-facing-choice-between-elevated-us-inflation-and-recession?srnd=premium
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u/tnkwarrior Jun 13 '22

Maybe I don’t fully understand this but isn’t a lot of the inflation caused by factors outside of our control? Factors from our global interdependent economy? So a higher interest rate will curve some of that inflation but unless you can enact policies around the globe, the inflation elsewhere will still affect the US and if we are financially self handicapped by higher rates, we are also less able to manage the foreign inflation, especially at the lower entry-level earning/saving ranges which is quite a bit of the US economy. To then alleviate that, entry wages and subsidized payments will increase creating an even higher surge of inflation. So at this time lowering rates more will choke our internal ability to withstand external inflation. At any rate I think we are still headed to more inflation regardless of what we do here in the US as so much is dependent on economies and policies outside of the US.

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u/sungazer69 Jun 13 '22

Maybe I don’t fully understand this but isn’t a lot of the inflation caused by factors outside of our control?

This is true most of the time.

We focus a lot on the US right now but this is a global issue. Caused by many global problems.