Fed raises rates by half a percentage point — the biggest hike in two decades — to fight inflation
CNBCOct 19, 2022
The Facts
On Wed., the Federal Reserve ("Fed") raised its benchmark interest rate by 0.5 percentage points, marking the sharpest increase since 2000.
The increase was unanimously approved by the committee's ten voting members and will raise the target range for the federal funds rate to 0.75–1%.
The Spin
Establishment-critical narrative
The Fed's goal to dampen inflation without inducing a recession - known as a "soft-landing" - is a pipe dream. The central bank waited too long to start cooling inflation and is now overcompensating, which runs the risk of slowing the economy so much that it shrinks.
Pro-establishment narrative
There is broad consensus among Fed bankers and economists that it's time for some quantitative tightening to rein in inflation, and the market is breathing a sigh of relief after the latest announcement. While the process of bringing down inflation is not pain-free, the economy is strong and a recession isn't likely.
