The Fed raises interest rates by the most in over 20 years to fight inflation
npr.org
npr.org
(Someday. Almost certainly. Most everybody does, at some point.)
It's newsworthy, I suppose, that the Fed see the need to change monetary policy.
It's not clear to me how much control they have these days, however. Of course, they could set the interest rates where ever they like, and yes, this will affect the economy, but I have a difficult time believing that we would be headed for 1980s-style stagnation-with-inflation.
30-year residential mortgage interest rates popping to 6 percent is not the result of a rational housing market. I don't think Federal Reserve Bank has much they can do about that.
A key driver of near-term consumer price inflation is the spike in the petroleum market and global disruption of energy and food supplies from Putin's invasion of Ukraine. And ongoing supply-chain disruption that arose out of the ongoing global pandemic. Monetary policy has little to say in the face of these crises.
It may be reasonable to believe that one-off crisis after crisis will become the new normal, and yet I have no idea how to change economic behavior to best address that threat. Well, actually, I do, but any prioritization of domestic infrastructure building or change to carbon-neutral (at least) energy or actually applying non-zero economic value on existing ecosystems -- any characterization of such policies as rational responses to current trends, at least as respectable as faffing about with monetary policy -- and the owners of America start howling with rage.
Ugh.
We're all gonna die.