Federal Reserve keeps waiting for more data before cutting interest rates

CEI’s Ryan Young is cited on The National Desk about Federal Reserve interest rates:

“The Fed has done just about all that it can on the inflation front, I think most of what’s left is expectations and that’s not entirely in under the Fed’s control,” said Ryan Young, a senior fellow at the Competitive Enterprise Institute.

Higher interest rates slow economic activity by making it more expensive to borrow money on things like auto loans and credit cards, which the Fed hopes to use to put a damper on spending to ease inflationary pressures.

The central bank is facing some political pressure to ease its restrictive stance on rates to help give consumers more breathing room as they are still adjusting to higher prices, but officials are prioritizing restoring stability in prices.

“High interest rates mean higher mortgage payments, higher car payments, higher student loan payments. The Fed wants to give people some relief on that,” Young said. “The trouble is if the tradeoff is higher inflation for a longer period of time, then then it’s not worth it.”