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Re: “Fed’s Powell reinforces likelihood of more rate hikes because of persistently high inflation” [June 22, Business]:
In my expertise as an economist, I really feel the Federal Reserve is barking up the mistaken tree growing rates of interest.
Our present inflation is cost-push inflation, not demand-pull inflation. That’s, our inflation is attributable to basic market elements: increased power prices, increased housing prices, increased meals prices and never sufficient expert employees.
Larger rates of interest is not going to develop extra meals, or scale back power demand. They won’t prepare extra nurses, electricians or auto restore technicians. They usually enhance the price of new housing.
The one a part of the issue that Congress (and the state of Washington) have addressed is power. The Inflation Discount Act gives robust incentives for renewable power and power conservation. The state is launching some essential and good power effectivity packages.
However nobody is engaged on the shortfall in expert labor. We have to be investing in group faculty and technical schooling. We have to be restoring immigration of expert professionals, significantly medical personnel from the Philippines. That isn’t occurring.
The Federal Reserve, and its Chairman Jerome Powell, want to know the issue higher. Larger rates of interest usually are not the answer.
Jim Lazar, Olympia
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