When faced with an uphill battle, resolve can be hard to muster. It’s not easy to carve out the right path, and sometimes doing what’s necessary can come at a risk. As inflation continues to remain, the Fed and its leadership are demonstrating that resolve to combat the inflation target problem until it’s solved, CNBC’s Jeff Cox reports.
Standing Firm
Global inflation is rampant, due to political unrest and the remaining effects of the pandemic. There is an increasing demand and minimal supply, resulting in rising prices and lowered purchasing power for the average consumer. The Fed’s plan to lower inflation has revolved around hiking interest rates as a means of methodically slowing economic growth and lowering demand. Retired seniors are at a particular disadvantage as they live of a fixed income, unable to keep pace with higher prices and higher interest.
When quoted in May, the Fed’s chairman Jerome Powell said that they wouldn’t hesitate to continue raising interest rates to get inflation down. Former chairs of the Fed have expressed worry about stagflation, but Powell is firm in his stance that the Fed will do what it must.
Staying on Inflation Target
A healthy inflation target for any economy is an estimated 2 percent. Our current rate of inflation is closer to 8 percent. Getting the inflation target back down to what it needs to be will take time and effort. Treasury Secretary Janet Yellen outright rejected the idea when some global economists suggested moving the goal line and settling for an adjusted target.
Letting the rate of inflation stay above 2 percent is a half-measure, and only stalls the economy for longer. The Fed leadership is in agreement, that lowering inflation isn’t an option but a necessity. Normal people will bear the brunt of inflation in the meantime. Senior benefits tighten, and everyone will need to be creative with their finances moving forward for the foreseeable future. The Council for Retirement Security is looking to protect the Social Security Trust, not just from inflation but also from insolvency. Join the Council in its fight and see your benefits weather this economic storm.
