The Surprise: Fed Keeps Interest Rates High, Unemployment Rate Increases and Inflation Continues to Pressure the Economy

The jobless rate in the United States has increased to 3.9 percent, which is higher than what economists had predicted. This news was released by the Labor Department shortly after a Federal Reserve committee decided not to cut interest rates.

Joseph Gaffoglio, the president of Mutual of America Capital Management, stated that the slower job growth is actually positive news for the Federal Reserve. This indicates that interest rate hikes are having an impact on a labor market that has been strong in recent years. The Fed is proceeding with caution when it comes to any potential interest rate cuts in order to keep inflation under control, which could continue to put pressure on the job market in the future.

In March, consumer prices rose by 3.5 percent compared to the same month last year, moving further away from the Fed’s target. At that time, the central bank had signaled potential rate cuts for 2024. A recent CNN poll showed that only 34 percent of voters approve of President Biden’s handling of the economy, with even fewer, 29 percent, approving of his approach to inflation. Voters believe that former President Trump, who is seen as a likely Republican nominee for president in 2024, would handle the economy better than Biden.

As we move closer to the 2024 election cycle, there has been increased scrutiny of the Fed and its interest rate policies