Fed Rate Hike

The government will soon be spending more on interest than on defense.

A majority of Americans now say runaway prices are causing their households financial stress. So, Federal Reserve Chairman Jerome Powell has pledged to do whatever it takes to fix the problem. Yet Powell’s plan to curb inflation could have big consequences for the United States government.

On September 21, the Federal Reserve raised its interest rate by three quarters of a percentage point to a range between 3 percent and 3.25 percent. This is the highest Fed rates have been since the Great Recession, and many analysts expect the Federal Reserve to raise rates again later this year. The idea is to bring down inflation by making it more expensive to borrow money, thus shrinking the money supply. But the catch is that shrinking the money supply could push the government into bankruptcy.

Read more at “Fed Rate Hike to Add Trillions to Debt”