Dow Falls 400 Points As Fed Readies Another Interest Rate Hike—Fueling Extreme Investor Bearishness
ForbesNov 25, 2022
The Facts
In its latest move to fight record high inflation, the Federal Reserve ("Fed") on Wednesday issued a 0.75% interest-rate hike, bringing its benchmark lending rate to between 3% and 3.25% — the highest seen since early 2008.
This was the fifth rate hike since March and the third consecutive three-quarter point rise. The central bank indicated that further increases should be expected.
The Spin
Establishment-critical narrative
What the Fed is forgetting to factor into the inflation equation are supply chain issues, which are also contributing to rising prices. If supply bottlenecks continue, then these rate hikes could add to an already growing unemployment rate without actually bringing prices down — if that becomes reality, the US is looking at a devastating recession.
Pro-establishment narrative
Though no one knows yet whether we're headed toward a recession, what we do know is that the economy must be cooled down in order to fight inflation. The Fed's only goal, for now, should be bringing prices down, which is what they've rightly committed to doing.
