Lubbock Times

WASHINGTON, D.C. – Today, the Federal Open Market Committee (FOMC), the Federal Reserve's committee responsible for determining the future path of interest rates, announced a 0.5 point reduction in the federal funds rate.

House Budget Committee Chairman Jodey Arrington (R-TX) released a statement addressing the current economic state: “The Federal Reserve’s activist monetary policies along with the Biden-Harris’ reckless spending were the Molotov cocktail for our current inflation crisis and economic decline. What the Fed characterized as transitory became record inflation; and, eleven interest rate hikes later, we are still not at the Federal Reserve’s 2% ‘soft landing’ target."

Arrington continued, "The bigger problem has become the threat of a recession supported by the rise in the unemployment rate, which is up almost one point. This is driven by an almost 25% increase in the number of unemployed Americans. Unfortunately, the damage from the Democrat’s unbridled spending and Biden-Harris’ failed economic agenda has been done, and it was worse than we imagined. What’s missing from the strategy to bring down inflation and strengthen our economy is less spending, less taxes and regulations, and less debt.”

Inflation began rising in 2021 after a Democrat-controlled government introduced new spending measures. Inflation peaked at 9 percent year-over-year in June 2022. In response to this runaway inflation, the Fed hiked interest rates a total of 11 times between March 2022 and July 2023 to their highest level in 23 years.

For nine consecutive FOMC meetings, rates remained at 5.25-5.50 percent due to persistent inflation concerns. The Fed had indicated it would lower rates if it believed inflation was on track to meet its target of 2 percent. With inflation now heading towards that goal, attention has shifted to a deteriorating labor market.

Under the Biden-Harris Administration, unchecked spending and regulations have impacted economic stability negatively. The unemployment rate has risen by nearly one percent since early 2023. A dismal jobs report last month was compounded by another downward revision this month—adding to nearly one million jobs recently revised down by BLS.

Consumer confidence remains low compared to previous years. The Consumer Confidence Index peaked at 137.9 in October 2018 when inflation was at a year-over-year rate of 2.5 percent but now stands at just 103.3 with similar inflation levels.

In Q4 of 2018, when consumer confidence was high, debt-to-GDP ratio stood at 105 percent; today it stands at 122 percent.

Since Biden-Harris took office, costs for goods and services have increased nearly 20 percent annually for families trying to maintain their standard of living prior to this administration.

Further information on these topics can be found through statements released by Chairman Arrington on various economic issues such as consumer pessimism about their current standing in August or BLS revising down its preliminary annual benchmark review of employment data by over eight hundred thousand jobs.

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