There continues to be no end in sight to inflation in the U.S., now at 8.6%, as Federal Reserve officials now fear it may become “entrenched.”

Minutes released Wednesday from the Federal Open Market Committee’s (FOMC) June 15^th meeting show policymakers “concurred that the economic outlook warranted moving to a restrictive stance,” signaling higher interest rates will be coming soon.

The Fed additionally has “recognized the possibility that an even more restrictive stance could be appropriate if elevated inflation pressures were to persist,” FOMC minutes show.

Further, Fed policymakers fear there is “a significant risk…that elevated inflation could become entrenched if the public [begins] to question the resolve of the Fed.”

This is a phenomenon that may already be happening, as the percentage of Americans in a Gallup poll expressing a “great or fair amount of confidence” in Jerome Powell’s leadership dropped from 55% in May 2021 to 43% in May 2022—a decrease of 12 percentage points.

‘Driving the US Economy Off a Cliff’

Fed officials are predicting a potentially alarming combination of stagnating growth and higher inflation, aka stagflation, in the coming months. In June, The Fed projected 2022 GDP (gross domestic product) of 1.7%, revised down from a 2.8% GDP projection in March.  

Senator Elizabeth Warren, D-Mass., recently blasted Fed policies and interest rate hikes as being damaging to the economy.

Criticizing Federal Reserve Chairman Jerome Powell and the Fed’s policies at a June 22^nd Congressional hearing, Warren said rising rates make it “more expensive to invest” for American families.

“Right now, the Fed has no control over the main drivers of rising prices, but the Fed can slow demand by getting a lot of people fired and making families poorer….I just want to say, you know what’s worse than high inflation and low unemployment? It’s high inflation with millions of people out of work—and I hope you’ll reconsider that before you drive this economy off a cliff.”

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