The Federal Reserve is widely expected to lift its short-term interest rate Wednesday for the first time in three years to fight stubbornly high inflation, a move that would put the central bank at odds with Donald Trump’s support for a cut.

An increase in the Fed’s rate, currently about 3.6%, isn’t guaranteed because Fed Chair Kevin Warsh doesn’t provide the signals about next moves that his predecessors did. Still, most analysts and economists expect a hike after a speech two weeks ago at the Fed’s annual conference in Jackson Hole, Wyoming, in which Warsh argued that the Fed had not yet achieved its goal of putting inflation in check.

A rate hike would throw another sharp shift into a volatile period for the economy and financial markets. As recently as March, the Fed had forecast it would cut its rate once this year. But with the Iran war flaring up again and causing sharp increases in oil and gas prices, inflation is likely to remain higher than the Fed’s 2% target for even longer.

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[–] 20 points 1 day ago (1 child)

The orange monkey is screaming about the midterms. Despite everything else that matters, when it comes to elections James Carville still has it nailed: "it's the economy, stupid". American voters care first and foremost about their pocketbook. While other issues are at least close, polling shows Americans generally care about the economy the most. And as fucked up as it may be, the GOP has long held an edge in that area. But, thanks to Trump, that has been slipping. Between oil climbing above $100 and taking gas prices with it, grocery prices climbing, and inflation staying stubbornly high, Trump's ability to convince enough Republicans to ignore reality and keep voting for failed policies is falling apart. This latest screed is him trying to follow in Turkey's footsteps. Back at the start of that crisis, Erdogan kept forcing the Turkey Central bank to lower interest rates while inflation was going hyper, in complete contradiction to anyone with a clue how economics worked. But, easy money got him re-elected. Then he finally listened to reason, but the damage had been done and their economy is still struggling to recover. This is what Trump is trying to do here. Get the short term political win at the expense of fucking everyone's bank account.

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