Readers respond to last week’s Feedback Friday topic, which was:
Inflation & Rising Interest Rates
Last week, Federal Reserve Chairman Jerome Powell announced that the Reserve has raised the short-term interest rate by three-quarters of a point (0.75%), the largest single increase since 1994. This in an effort to curb the inflation that the U.S. economy in experiencing. In a similar move on Thursday, the Bank of England announced it, too, has raised interest rates to curb inflation in England. The United States and England are not alone. The global economy has stalled and is, indeed, experiencing inflation—many countries are taking similar approaches to economic mitigation.
Here's the quick and dirty version of inflation theory, causes, and effects. Inflation is the result of a strong economy. Pandemic aside, the U.S. has generally experienced a strong economy since recovering from The Great Recession of ’07–09. During this time, borrowing money was done at historically low rates, which increased consumer spending power, and ultimately led to rising prices of consumer goods over time. Hence inflation. But by raising the short-term loan interest rate, the Federal Reserve has now made short-term borrowing more expensive, thus softening borrowing and consumer spending overall. Consumer prices should decrease over time.
This is all to ask…what do you believe are factors that contributed to national and global inflation? Do you blame government leadership, or do you consider other domestic and global variables? How are you faring during this challenging economy?
What do you think about inflation, interest rates, and the economy?
Here’s what you said:
I am the director of a small (16 employees) pet clinic and am having to cut back on patients treated, even though there is a huge demand, because I can't hire employees. The employees we have don't want to come to work. How are families living?
Jean Radeackar, Annapolis
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