Steve Forbes says the Fed is ‘inflicting unnecessary pain’ with interest rate hikes Cryptocurrencies and ICOs

Media mogul Steve Forbes, the chairman of Forbes Media, has warned that the Federal Reserve is “inflicting unnecessary pain” on the US economy with its interest rate hikes after Fed Chairman Jerome Powell said that the Fed is prepared to raise interest rates at a faster rate. He also pointed to “the fundamental flaw in the approach of central bankers and most economists.”

Media mogul Steve Forbes warns about Fed policies

Steve Forbes, president of Forbes Media, warned Thursday that the Federal Reserve is “inflicting unnecessary pain” on the US economy. His warning followed Fed Chairman Jerome Powell’s testimony before the Senate Committee on Banking, Housing and Urban Affairs.

“Federal Reserve Chairman Jerome Powell rocked financial markets when he told a Senate hearing on Tuesday that our central bank is ready to raise interest rates, and at a faster pace than anticipated,” Forbes began. . The media mogul noted that Powell’s reason was that the US economy “has been showing unexpected strength; therefore, the Fed may have to do more to suppress it.” The executive highlighted:

Here we come to the fundamental flaw in the approach of central bankers and most economists: they think that prosperity causes inflation. To cure that, they work to depress the economy.

“They have never understood the definition of inflation: reducing the value of a currency, usually creating too much,” the Forbes president emphasized, adding:

Price increases from natural disasters, wars, Covid lockdowns, or regulations and taxes that kill the economy cannot be cured by raising interest rates. The Federal Reserve is, and will be, inflicting unnecessary pain.

Powell told senators during a congressional hearing on Tuesday that “From a broader perspective, inflation has eased a bit since the middle of last year, but remains well above the (Committee Committee) long-term target of 2%. Federal Open Market) of the FOMC”. He explained: “We continue to anticipate that continued increases in the target range for the federal funds rate will be appropriate to achieve a monetary policy stance that is tight enough to return inflation to 2% over time.”

Several Fed officials have also said more rate hikes are needed to curb inflation. Last week, Bank of America warned that the Fed will continue to raise interest rates to the “pain point” for consumer demand. The president of the Federal Reserve Bank of Atlanta warned of “disastrous results” if the Fed loosens policy prematurely. Meanwhile, economist Mohamed El Erian said last month that the Fed cannot hit its 2% inflation target without “crushing” the economy.

What do you think of Steve Forbes’s remarks that the Fed is “inflicting unnecessary pain” on the US economy with its interest rate hikes? Let us know in the comments section.

kevin helms

Kevin, an Austrian economics student, found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects, and the intersection of economics and cryptography.