The Federal Reserve has a big move: raising interest rates. And the central bank just raised interest rates by three-quarters of a point for the third time in a row this week. But its previous rate hikes haven’t quite done the trick yet.
In August, the annual inflation rate reached 8.3%, according to Consumer Price Index released last week. The monthly percentage change in the overall CPI inflation rate is lower than it was in 2022, but many experts wonder if it will be enough – especially when the price of basic expenses like food and accommodation continues to increase.
Jamie Dimon has another idea.
He testified before Congress on Thursday alongside other Wall Street CEOs and delivered a line of frequently asked questions from Senator John Kennedy (R-La.). “I don’t want to brag about the expensive places I’ve been, but last night I went to the grocery store. Inflation is gutting the American people like a fish,” Kennedy said Thursday in a Senate Committee Hearings With CEOs of Seven of America’s Largest Banks.
Kennedy’s comment made the audience chuckle, but it’s true — grocery prices are a runaway cost for most American consumers. Bureau of Labor Statistics’ Food Index for August at home, calculates the change in the price of a basket of groceries, which has increased by 13.5% in the past 12 months. That was the biggest annual increase since 1979.
“Now we know what our Federal Reserve is doing in monetary terms, but I wanted to ask you what do you think we should do—we mean the federal government—[should do] financially? ‘ Kennedy asked the panelists.
“I think a little less fiscal spending would be good,” Dimon replied, noting that the US has spent 30% of GDP over the past two years — a move he called “literally unprecedented.”
When asked by Kennedy if the government needed to “back the American people in terms of regulation,” Dimon agreed.
“I think that would be helpful, especially for small businesses,” said Dimon. “I don’t want to sit here and complain about big companies, but I urge people to take 10 small businesses out to lunch and ask them how it feels to live through federal, state, and local regulations. like — even if they have a store. And that can help a lot.”
Dimon also noted that the federal government should also consider actions around continuing to improve the supply side of the equation: taxes, immigration regulations, health care and infrastructure are enabling the bill. .
“If you do some of that, you help grow the economy through inflation,” he said. Instead of pure tax cuts, Dimon notes that taxation should be adjusted to generate more growth.
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