The Federal Reserve’s decision to leave key interest rates unchanged for the second time in three months was an expected, welcome move, but it is still “walking a tightrope” on inflation, Rep. Dan Meuser, a member of the House Financial Services and Small Business committees, said on Newsmax Thursday.
Still, the idea that the Fed could add another .25 points in November is “not totally unexpected,” the Pennsylvania Republican told Newsmax’s “Wake Up America.”
“The Fed does not want to overreach,” Meuser said. “We get a feel that wages are coming down, even though the inflation rate was higher than anticipated last month. I think the Fed believes that perhaps that was somewhat of an anomaly, and we may see some less inflationary pressures moving along, so they don’t want to overshoot.”
The Fed on Wednesday voted to hold interest rates at a 22-year high and predicted that lending rates will also need to remain higher to cool inflation.
The members also left the median projection for interest rates for the end of the year at between 5.50 and 5.75 percent, which keeps alive the possibility of adding another quarter percentage point hike by the end of the year.
Meuser said that the interest rates “helped cause a number of problems with some pretty seriously large banks,” and from the standpoint of car or home loans, consumers are paying more.
“Car rates are now at 8% and the typical person buying a house, a $350,000 house, is paying $1,000 more a month now” than two years ago, he added.
Meanwhile, the level of Washington’s spending is the main contributor to the nation’s “rattled economy” and inflation, said Meuser.
“It’s the wildly excessive spending that we have now limited since we Republicans are in control, and it’s the assault on American energy that just continues,” the congressman said.
President Joe Biden and the White House, in just the past two weeks, have been “shutting down parts of Alaska” and its oil drilling, which will add to inflation, he added.
“That’s sending every signal to send oil to $100 a barrel and gasoline over $4,” he said. “That’s a major contributor to food prices, to groceries and gas, to things that people buy every day.”
Republicans, though, are looking to make some reductions to their budget, which has a Sept. 30 deadline, said Meuser.
“The American people have got to appreciate what we are dealing with,” Meuser said. “We’re not going to reduce defense spending. We’re not going to reduce homeland [spending] and we’re not going to reduce benefits to veterans.”
But that gives lawmakers “about a $750 billion to $800 billion slice of the pie to reduce,” he said. “Our plan is to go back to 2022 levels.”
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Sandy Fitzgerald ✉
Sandy Fitzgerald has more than three decades in journalism and serves as a general assignment writer for Newsmax covering news, media, and politics.
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