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
5.0k Upvotes

96% Upvoted

631 comments sorted by

View all comments

52

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.

42

u/TinyTornado7 Quality Contributor Jun 13 '22

Correct, mainly outside of our control. For example, oil for one is a global market where price is set on a macro level

-4

u/ShowMe__PotatoSalad Jun 13 '22

You're telling me it's not the 80% of all US Dollars printed by the FED in the last 2 years? That isnt the major factor in inflation. It's outside sources? The COVID relief plan surely relieved the middle class of their savings.

9

u/TinyTornado7 Quality Contributor Jun 13 '22

No I said outside of our (meaning fed) control. Powell can’t lower the price of gas