Inflation, Recession and the Farmer

During a meeting this week (Nov. 1-2), the Federal Open Market Committee of the Federal Reserve Bank (often called “the Fed”) once again raised the rate at which the Fed lends to other banks, this time by 0.75% to about 3.75%, and indicated an intent to continue raising rates at future meetings. This has been a rapid run-up from near 0% in February.

The Fed’s purpose in raising rates is to slow down the economy until prices stop rising.

They may slow down the economy, but they won’t reduce inflation any time soon, if history is any lesson.

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Allie Shipley