Powell admits it: Fed’s actions may lead to a recession

Fox Business reports that Jerome Powell, the chairman of the Federal Reserve, just admitted that the steps that are being taken by the central bank to fight inflation could very well lead the country into a recession. 

Powell made the admission during testimony that he gave Wednesday before the Senate Banking Committee. The purpose of the hearing was to update lawmakers on monetary policy.

Under the administration of President Joe Biden, inflation has been at a 40-year high. In an attempt to combat this, the Federal Reserve recently voted to raise interest rates.

The central bank, specifically, decided to raise interest rates by 75 basis points, which puts the rate between 1.50% and 1.75%, which is the highest it has been since the start of the coronavirus pandemic.

“It’s certainly a possibility.”

Economic experts are now concerned that a recession could very well result from the Fed’s actions.

Powell, on Wednesday, admitted that such concerns are legitimate.

“It’s certainly a possibility,” he said. “We are not trying to provoke and do not think we will need to provoke a recession, but we do think it’s absolutely essential that we restore price stability, really for the benefit of the labor market, as much as anything else.”

Powell further revealed on Wednesday, despite the recession concerns, that the Fed will continue to raise interest rates until there is “compelling evidence” that it is bringing down the astronomical inflation that the country has been seeing. Powell told reporters that another increase of 50 to 75 basis points is being considered for July.

Powell v. Biden

As Breitbart News points out, Powell, during Wednesday’s hearing, did not go along with the Biden administration’s inflation narrative – that the exorbitant inflation that Americans have been seeing is the result of the Russia-Ukraine conflict. This is what President Joe Biden has been referring to as Putin’s price hike.

Powell, though, refused to go along with this narrative on Wednesday. When asked whether “the war in Ukraine is the primary driver of inflation,” Powell responded, “no.”

“Inflation was high – certainly, was high – before the war in Ukraine broke out,” he said.

Powell will now appear before the House Financial Services Committee on Thursday.

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