NICK GOSNELL
Hutch Post
HUTCHINSON, Kan. — President Joe Biden met with Federal Reserve Chairman Jerome Powell on Tuesday and Creighton University economist Ernie Goss believes that means significant efforts to curb inflation are coming.
"They're going to raise rates by another percent, one percentage point, by August the 1st. That's one rate increase in June, rate increase in July. If that's all we see, that's going to be very positive."
There are some external factors, like the European Union's oil sanctions against Russia, that could still have an inflationary effect going forward.
"We've got to keep an eye on the price of oil," Goss said. "We've got to keep an eye on the inflation as reported by the U.S. Bureau of Labor Statistics on June 10th and keep an eye on the yield on the 10-year Treasury, the interest rate there. If that heads higher, that would concern me."
The President's budget plan also contemplates a tax increase on capital gains and on the top marginal tax rate and even a proposal to tax unrealized capital gains, which would be taxing income on those earning over $100 million that they haven't earned yet.
"The President's got plans for a tax increase," Goss said. "That's just strange timing, at least as an economist sees it. Let the Fed do its work and that will be raising rates."
It remains to be seen if the rate increases themselves will cause the economy to coast into healthy growth, or if things will flip over to a recession in the coming months.