Rate hikes drive millions out of jobs

Will Daniel, “The 2022 economy is like a 4-engine airplane with only one that works—and most experts want to turn it off, top economist says,” Fortune, 8-27-22, https://fortune.com/2022/08/27/economy-four-engine-plane-inflation-employment-personal-consumption-william-spriggs/

Federal Reserve officials have been playing hardball when it comes to inflation this year, arguing that the American economy is overheated and interest rate hikes are needed to achieve price stability.

But one top economist says the Fed’s policies are pushing the U.S. towards a potential disaster.

William Spriggs, an economist at Howard University, told Fortune that the Fed will drive the U.S. economy into a recession and throw millions out of work if it continues aggressively raising interest rates.

Spriggs criticized Fed officials, and his fellow economists, for failing to recognize the impact of unemployment on Americans, and particularly on communities of color that experience higher unemployment rates during recessions than the population overall.

He believes the Fed’s decision to emphasize one part of its dual mandate (price stability) over the other (maximum employment) is short-sighted given the encouraging signs that inflation may have peaked and the current macroeconomic challenges facing the world—from the European energy crisis to climate change-induced heat waves.