According to the Nov. 30 report from Bloomberg, the Fed chair’s comments before the Senate Banking Committee this week. More so, Both Democrats and Republicans have equal concerns about high prices and inflation.
Furthermore, He urges the Fed to start to wrap up its bond purchasing scheme earlier than the normal mid-2022 target.
Also, The word “tapering,” in use, means a gradual slowing down of purchases of securities and bonds.
More so, The central bank is effectively printing money to buy bonds, targeting at pushing down interest rates which are currently at 0.25%.
Notably, Lower interest rates equals more borrowing. Thereby, stimulating the economy and spendings. But, money printing has a way of increasing inflation and gradually wears away the value of the currency over time. Of course, this results in Bukele’s comments today.
More so, as per the Federal Reserve Bank of St. Louis Economic Research (FRED), the five-year breakeven inflation rate spikes to over 3% in November. Notably, this is the highest level for more than two decades. Consequently, the consumer price index for all urban consumers (Core CPI), measuring the average cost of goods less food and energy, is also at an all-time high.
Additionally, The figures shows clearly that the situation is not “transitory” despite what the Fed claims.
“Can you guys just stop printing more money?”
“You’re just going to make things worse.”
“Really. It’s a no brainer.”
https://t.co/reVH1irzOt — Nayib Bukele 🇸🇻 (@nayibbukele) November 30, 2021
Photo credit : Forbes
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