Federal Reserve Chairman Jerome Powell believes the US economy is moving towards a new normal, he said on Friday. Event “Fed Listens”. “Unless rents rise, housing is poised for an epic crash, none unless rents rise.”
Powell kept his comments short, but explained that with regard to inflation and the current economy, “we are still dealing with an unusual set of disruptions.” His view is not new, as Powell has previously said the US economy should brace for “what pain,” earlier this month.
The Fed recently raised interest rates by 75 BPS. Powell did not comment on the rate hike during the event. Currently, the economy is still battling inflation, with a slight decline to 8.3% after a record summer.
The fight against inflation has been a conflict for the Federal Reserve. With interest rates rising, critics are concerned about the long-term ramifications of raising these rates. On the other hand, world events such as the Russian invasion of Ukraine have raised prices for valuable resources worldwide. Hence the rise in tariffs in the US
However, the biggest victims of the current economy are the
“new normal” are lower-class households whose wages do not keep pace with inflation, according to Fed Vice-President Lael Brainard. Brainard also spoke to the Fed Panel on Friday in defense of the families and those who reacted negatively to the price increases. While the US consumer index is also rising, the Fed is sacrificing the US economy to stop it.
In addition, seven of the board’s governors attended the panel, with Philip Jefferson and Lisa Cook making public comments for the first time about their roles as Fed officials.