Fed Raises Interest Rate for First Time Since 2018

    Photo: AP [via Financial Times]

    The Facts

    • The Federal Reserve announced on Wed. that it will raise its benchmark federal-funds rate by a quarter-percentage point, the first rate increase since Dec. 2018.

    • The committee also tentatively scheduled increases at each of the six remaining meetings this year, pointing to a rate of 1.9% by the year's end, and three more hikes in 2023.


    The Spin

    Republican narrative

    Soaring inflation was the predictable outcome of Biden's big government legislative agenda and reckless spending on things like the American Rescue Plan. In addition, anti-energy policies, such as shutting down the Keystone XL pipeline and limiting offshore drilling, have added to the high energy costs. To fight inflation, the government should cut regulations and end its anti-energy policies.

    Democratic narrative

    Putin's decision to invade Ukraine has boosted inflation worldwide by pushing gas and energy prices up, and this has nothing to do with Biden. Prices might get higher during this year but it's temporary and inflation will cool down by the end of the year as supply chains recover from the COVID disruptions.


    Political split

    LEFT

    RIGHT

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