Economy
Inflation’s Ripple Effect: The 2024 Surge in Homelessness and Heists
It is not a hidden fact that average middle-class American families have been hitting rock bottom for the last year or two. Inflation has been at an all-time high, and people, particularly in California, can no longer afford to buy a home or even rent one. Part of this trend is due to rising interest rates.
The Board of Governors of the Federal Reserve System voted unanimously to raise the interest rate paid on reserve balances to 1.65 percent, effective June 16, 2022.
As part of its policy decision, the Federal Open Market Committee voted to authorize and direct the Open Market Desk at the Federal Reserve Bank of New York, until instructed otherwise, to execute transactions in the System Open Market Account by the following domestic policy directive:
Federal Reserve has recently decided to maintain the benchmark interest rates steady at 5.25% to 5.5%. This move reflects the agency's intent to cautiously navigate the country’s economic landscape. The federal reserves Dot-plot approach may serve as an insight path for future rate cuts. Thus, bankers expect step wise rate cuts by the end of the year, hoping to see rates plummet to 4.6%.
As optimistic as it may sound, the federal reserves decision certainly is not expected to do a year good to low to moderate-income families. Credit card and loan interests will continue to be hefty.
Let us notice that the feds can, do, and have intentionally induced inflation. What I would like to call “the economic monopoly” is a contentious practice as it has been shown to present mixed outcomes.
For instance, governments can use contractionary monetary policy to reduce the money supply within an economy, which often involves increasing interest rates to slow economic growth and spending. Additionally, governments may implement wage and price controls to influence inflation directly, although this approach has been less favored due to its mixed results in the past.
As we watch closely how the feds unwind the inflationary tangle, we may continue to witness continued homelessness crises and retail theft across the country.
