We support our Publishers and Content Creators. You can view this story on their website by CLICKING HERE.

As Americans are struggling every day with 40-year high inflation, gas and food prices, the Federal Reserve is meeting this week to contemplate what to do.

At the Fed meeting, scheduled to wrap up on Wednesday, a 0.5% hike is likely in store, according to Fox.

But it’s the anticipation of what comes next in July that has market pros anxious: the possibility of a major rate hike not seen in years. Some are betting on a 0.75% or even 1% hike. 

A 1% hike has not been done since the 1980’s.

RELATED: Progressive Defeats In California Reveal Democrats’ Rift With Minority Voters

No Good News

The Consumer Price Index jumped to 8.6% up from a year ago, and from just April to May rose another 1%. Quite a departure from the predictions experts had made for a CPI jump of only 8.3% and a 0.7% month to month rise. It is the fastest rise in inflation since 1981.

The producer price index, which measures the prices received by manufacturers, has risen 10.8% in the last year.

In short, inflation is very, very bad right now. Hence, the calls for unusually aggressive interest rate hikes at the Fed. 

As for the “experts” who have enormous influence over the economy, they don’t quite seem to have a grasp on what’s happening.

Just last month, Fed Chair Jerome Powell dismissed the possibility of a 75-basis point hike saying, “A 75-basis point increase is not something that the committee is actively considering.”

RELATED: Lindsey Graham Cuts Deal With Bernie Sanders To Oppose ‘Election Deniers’ And ‘Defund The Police’ Candidates

What Is Really Affecting Americans

The inflation that the bureaucrats are trying to keep up with by tweaking interest rates is not pretty, and not getting any better.

A trip to the grocery store is up 11.9%. Want a break from cooking and decide to eat out? That is up 7.4%. The price of a gallon of gas is up 48.7% and fuel oil rose a whopping 106.7%.

As of today, the national average price for gas is $5.01. 

The broader picture is no better. Economists at Morgan Stanley have expressed concern over the possibility of impending stagflation, the end result of high inflation and a stagnant or shrinking economy. This could also affect an already roller coaster stock market. 

RELATED: New York Sitting On $4.3 Million Worth Of Unused Hand Sanitizer

What Does It All Mean?

A significant hike in interest rates from the Fed affects, well, anything that has an interest rate. Things like savings and bonds accrue higher interest payments. But as interest rates climb, expect to pay more on things like credit card bills and mortgage payments. 

Higher interest rates also affect things like refinancing an existing mortgage or paying off student loans. Big ticket items will also cost more, as mortgage rates and auto loan rates rise. As most know, even a small change in interest rates on a large purchase can mean big bucks down the line.

Rising rates make borrowing more expensive in general, even affecting the liquidity of things like stocks and even crypto currency. 

But despite all of the dire economic news and predictions, last week, in a remarkable display of being out of touch with average Americans, White House Press Secretary Karine Jean-Pierre insisted that, “the president’s economic plan, as we see it, is working.”

Now is the time to support and share the sources you trust.
The Political Insider ranks #3 on Feedspot’s “100 Best Political Blogs and Websites.”