The specter of inflation is haunting the world’s economies. Surging prices since 2020, especially in food and energy, have eroded global living standards, though inflation varies considerably across countries. However, inflation is hitting the working class and lower-income people harder than wealthier households, triggering protests around the world, especially in countries with strong trade… Source Source / Read More: The Fed’s Response to Rising Inflation Protects the Wealthy at Workers’ Expense
Federal Reserve
Warren, Sanders Slam Federal Reserve’s “Disregard” for Working Families
A group of Democratic lawmakers led by Sen. Elizabeth Warren (D-Massachusetts) is pressuring the Federal Reserve to explain why it’s continuing to raise interest rates at such a rapid pace when economists across the political spectrum say that rate hikes will only hurt the working class with little upside for the economy at large. In a letter sent to Fed Chair Jerome Powell on Monday, 11 members of Congress lay out a wide swath of evidence from both Powell himself and from economists that American families will be in for “pain” in the coming months, as Powell has said, as…
Federal Reserve Puts Burden of Curbing Inflation on Global Working Class
On Wednesday, at the end of a two-day Federal Open Market Committee (FOMC) meeting, Federal Reserve chair Jerome Powell announced a tightening of monetary policy in response to the highest U.S. inflation in 40 years. The burden of this measure will fall disproportionately on the working class, both in the U.S. and abroad. In a press release the FOMC said the current inflation rate reflected “supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures.” The Fed raised its benchmark policy rate by 0.75 percentage points, the first increase of this magnitude since 1994. This…
GOP’s Tax Plan Would Raise Taxes by Over $1,000 Annually for Poorest Americans
Sen. Rick Scott’s (R-Florida) plan to force every American to owe income tax in his recently released platform for the Republican Party would raise taxes by over $1,000 for the bottom 40 percent of income earners, a new analysis found. In a report released on Monday, the Institute on Taxation and Economic Policy (ITEP) estimated that the poorest Americans would be the most affected by Scott’s plan — meaning that the GOP’s tax plan would essentially be to tax the poor. The poorest 20 percent of Americans, who make $12,300 a year on average, would owe about $1,050 more in…
Fed Chair Jerome Powell Says Corporations “Are Raising Prices Because They Can”
In a hearing before the Senate Banking Committee on Tuesday, Federal Reserve Chair Jerome Powell said that corporations may be raising prices arbitrarily to pad their profits while the public suffers under high inflation rates. Powell said that higher prices for commodities like groceries could be chalked up to corporate greed, at least partially. This statement echoes recent research that shows that businesses are seeing some of their highest profit increases since 1950, using inflation as an excuse to reach further into consumers’ pockets. The statement came as the result of prodding from Sen. Elizabeth Warren (D-Massachusetts). During a confirmation…
Elizabeth Warren Demands Information on Fed Official’s Questionable Stock Trades
Sen. Elizabeth Warren (D-Massachusetts) recently sent a letter to Jerome Powell demanding more information on stock trades by Federal Reserve Vice Chair Richard Clarida after a New York Times report revealed that Clarida failed to disclose the extent of his trades just before the stock market crashed in 2020. Last year, Clarida reported moving between $1 million and $5 million into an investment fund, buying shares on February 27th, 2020 – the day before Chair Powell made a major announcement about rule changes at the Fed in preparation for the pandemic. However, Clarida recently amended that financial disclosure to reflect…