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As I See It

Will the Fed’s deft hand be enough to reduce inflation?

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Is this the nudge our economy needs, or will it send the economy off a cliff? The Federal Reserve, as expected, raised the benchmark interest rate by another 0.75% in an effort to combat runaway inflation. The hope is the rate hike will slow inflation by reducing demand, but that also means higher borrowing costs and higher rates for things like mortgages, car loans and credit card debt. There are fears the Fed’s decision could send the country into a recession, but the stock market seemed happy with yesterday’s decision. Trying to reign in the economy without causing further damage is a delicate balance. Unfortunately, besides bumping borrowing rates, there is little else that can be done to bring inflation under control while helping restore consumer confidence. There are few arrows left in the quiver. President Biden gets the blame of course, but there is no way to wave a magic wand and end the war in Ukraine, which is significantly driving up food prices. The Fed has a history of guiding with a gentle hand, but they’ve been wrong before. Let’s hope the decision to raise interest rates has the intended effect, and doesn’t cause more pain in this fragile economy.

Scott Robert Shaw serves as WIZM Program Director and News Director, and delivers the morning news on WKTY, Z-93 and 95.7 The Rock. Scott has been at Mid-West Family La Crosse since 1989, and authors Wisconsin's only daily radio editorial, "As I See It" heard on WIZM each weekday morning and afternoon.

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1 Comment

1 Comment

  1. Nick

    July 28, 2022 at 12:58 pm

    Inflation was going higher before the war started. The vast spending was the culprit. BIden was warned.
    He has been a disaster from the time he took office.
    First Trump and now Biden.
    And in a poll released this morning the Democrats want Harris and then Hilary. Then The transportation secretary who knows nothing about transportation and Newsom from loony California.
    The American people better wake up and realize the world is becoming more and more dangerous. China has been trying to infiltrate the fed for years.
    We need a serious media and serious candidates.
    We have no serious candidates and a media that sold out a long time ago.

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