Inflation has lifted the cost of just about everything, pushing overall prices up 8.6 percent in the past year and leaving many people concerned with what Washington policymakers are doing about it.
This week, as Wall Street teeters and warnings of a potential recession grow, the Fed is under even more intense scrutiny. The central bank announced on Wednesday that it is raising interest rates by three-quarters of a percentage point in an attempt to temper record inflation.
The bank’s aim is that inflation will stabilize over time without slowing economic growth too much and forcing job losses. But less rosy scenarios may materialize, including an economy defined by surging prices and clamped growth. Three years into the pandemic and the unfolding economic turmoil it brought, the Fed is at another crucial turning point. Here’s why: