Federal Reserve Hikes Interest Rates up 0.5 Percent, Slowing Pace of Increases

The Federal Reserve on Wednesday announced an interest rate hike of 0.5 percent, easing up a bit after a series of much higher increases.

With inflation at a record high, the Fed has been scrambling to get interest rates high enough to discourage people from spending money, slowing the economy down in turn. The last four rate hikes have been 0.75 percent.

The risk is that growth will slow while prices and borrowing rates stay high, sending the economy into a recession. Fortunately, there have been some signs that inflation is finally starting to ease a bit. But Fed Chair Jerome Powell warned that while “it’s good to see progress … we have a long ways to go to get back to price stability.”

In a statement, the Fed pointed to supply chain issues and high food and energy prices due to Covid-19 and the war in Ukraine as main factors for inflation continuing to stay high.

But also, “recent indicators point to modest growth in spending and production. Job gains have been robust in recent months, and the unemployment rate has remained low,” the statement said.

Dean Baker, senior economist at the Center for Economic Policy and Research, answered five questions about what this means going forward.

1. What does the 0.5 percent interest rate increase mean for consumers?

The interest rate hike means that rates for credit card debt, mortgages, and car loans will likely go up, Baker said—albeit less than after the Fed’s last policy meeting in November.

Over the past year, the rate hikes have also slowed down the housing market. However, Baker noted, “the number of construction workers has not fallen” due to a backlog in unfinished construction projects.

Jobs numbers have stayed high, which is positive for consumers but has caused concern for some experts that the economy has not slowed sufficiently to avoid a downturn.

Baker also warned that the higher interest rates push up the value of the dollar too, “which makes our goods less competitive internationally.”

2. What has changed in the past month that gives the Fed enough confidence to start slowing rate hikes?

But it’s not all bad news: “Inflation is clearly slowing in many areas,” Baker said. The October and November consumer price index, or CPI, a key government measure of inflation, indicate that inflation finally seems to be slowing a bit.

Baker attributes this to supply chain issues getting resolved. Costs for appliances and used cars, as well as shipping, have fallen.

3. Now that the Fed has been hammering away at inflation, what changes can people expect to start seeing?

The Fed indicated in its statement that it will continue to reevaluate the economic situation to determine what moves are necessary to get and keep inflation under control.

“The Committee anticipates that ongoing increases in the target range will be appropriate,” the statement said.

Powell told reporters that “it’s our judgment today that we’re not at a sufficiently restrictive policy stance yet, which is why we say that we would expect that ongoing hikes will be appropriate.”

But Baker said he hopes Powell “will indicate that he is prepared to adopt a wait and see attitude and hold off on further rate hikes.”

“This should mean further declines in mortgage and other interest rates,” he said.

4. Can a soft landing still be achieved?

The Fed has been clear its goal is to achieve a so-called soft landing, or a decrease in inflation without tipping the economy into a recession. And fortunately, the chances of a soft landing “look very good right now,” Baker said.

Inflation has slowed, but employment levels have remained high. It may take a while to reach the central bank’s target of 2 percent inflation, “but the direction of change is clearly downward,” according to Baker.

5. What are the current chances of a recession?

As the likelihood of a soft landing goes up, the likelihood of a recession goes down. In Baker’s opinion, the chances of a recession are “well under 50 percent at this point.”

The U.S. economy will probably take a hit from weaker markets abroad, as Europe struggles with direct effects from the Ukraine war and China battles a massive spike in Covid-19. But Baker is optimistic that won’t be sufficient to tip the U.S. into a recession.

“The biggest risks are from another wave of Covid or a big flare-up in the war in Ukraine,” the said.

This article has been updated.

People on the right seem unable to stop comparing Representative Ilhan Omar to white supremacists.

David Friedman, an adviser to Donald Trump’s 2016 presidential campaign who served under him as the U.S. ambassador to Israel, shared a tweet Tuesday that put the congresswoman on a level with Holocaust denier Nick Fuentes.

It is, of course, absolutely bananas to compare Omar and Fuentes. Since taking office in 2019, Omar—one of the first two Muslim women elected to Congress—has been repeatedly accused of antisemitism.

In early 2019, she said the U.S.-Israel relationship was “all about the Benjamins,” a reference to $100 bills. Omar was accused of propagating an antisemitic trope that Jewish people use money for influence. When she heard the criticism, she “unequivocally” apologized for her language.

But the claim that Omar is an antisemite has continued, often fueled by bad-faith attacks on her criticism of Israel. She was accused of saying Jews hold dual loyalty, for example, when she was actually accusing U.S. politicians of being overly pro-Israel.

Fuentes, on the other hand, actively promotes antisemitic views, such as denying the Holocaust and praising Hitler. A white Christian nationalist, he has said Jews are not part of Western civilization because they’re not Christian, and he has expressed support for a Catholic autocracy in the U.S. He has spread Covid-19 conspiracy theories and embraced homophobic and transphobic stances.

He is also apparently now close with Kanye West, who said he sympathizes with Nazis and likes Hitler.

Friedman’s comments came after Representative Kevin McCarthy doubled down on his promise to remove Omar from the House Foreign Affairs Committee should he be elected speaker of the House, again accusing her of antisemitism.

A coalition of liberal Jewish groups pushed back on him, saying his decision was “based on false accusations that she is antisemitic or anti-Israel.”

“We may not agree with some of Congresswoman Omar’s opinions, but we categorically reject the suggestion that any of her policy positions or statements merit disqualification from her role on the committee,” the groups said in an open letter published Monday.

“Leader McCarthy’s pledge seems especially exploitative in light of the rampant promotion of antisemitic tropes and conspiracy theories by him and his top deputies amid a surge in dangerous right-wing antisemitism.”

McCarthy has not explicitly condemned Trump for meeting with Fuentes last month, and actually defended the former president over it.

Omar has also hit out at McCarthy’s hypocrisy, saying on Twitter: “He does not care one bit about Jewish safety or any religious minority in our country.”

There have been at least 14 attacks on power stations across the country this year.

On December 3, two North Carolina power stations were struck with gunfire, leading to some 40,000 residents being without power, many of them for days.

Since mid-November, Oregon’s and western Washington’s electrical grids have been host to six attacks—some led by people with firearms—leaving customers experiencing brief outages in both states.

And in September, substations in Florida were targeted six times, with intruders forcing entry and tripping equipment that caused brief outages.

Federal agencies are becoming increasingly concerned amid the string of attacks. On December 2, the FBI co-issued a memo warning utilities about the attacks. North Carolina’s stations were attacked just a day later.

At the end of November, the Department of Homeland Security warned that “lone offenders and small groups” were continuing “to pose a persistent and lethal threat to the Homeland,” including on U.S. “critical infrastructure.”

In January, The Daily Beast obtained an earlier DHS intelligence report warning that extremist groups identified the “electric grid as a particularly attractive target given its interdependency with other infrastructure sectors.”

And earlier this month, CNN obtained a 14-page document circulating on Telegram that included a white supremacist instruction guide for how to conduct low-technology attacks that foment chaos, including attacking a power grid with firearms.

“When the lights don’t come back on … all hell will break lose [sic], making conditions desirable for our race to once again take back what is ours,” the document reads.

In February, three men pleaded guilty of plotting to attack substations with firearms; the trio were alleged white supremacists who had for years strategized how to incite civil unrest, a potential race war, and subsequently the second Great Depression.

The infrastructure connecting the nation is under increasingly high threat. And if enough light isn’t shined on what’s going on, we may soon lose that light, literally.

On Tuesday, Oregon Governor Kate Brown announced the state will be commuting the sentences of all 17 people on death row in the state, moving them instead to life in prison without the possibility of parole.

“I have long believed that justice is not advanced by taking a life, and the state should not be in the business of executing people—even if a terrible crime placed them in prison,” Brown said in a statement.

Brown’s action pushes forward with moratoriums first established by her Democratic predecessor, John Kitzhaber, in 2011.

“I also recognize the pain and uncertainty victims experience as they wait for decades while individuals sit on death row—especially in states with moratoriums on executions—without resolution. My hope is that this commutation will bring us a significant step closer to finality in these cases.”

Brown’s decision, made as she prepares to depart office after being term-limited, follows a growing opposition to the death penalty. Twenty-three states and Washington, D.C., have abolished the death penalty, while two others, California and Pennsylvania, have governor-issued moratoriums, as Oregon previously had. The death penalty is still legal in 27 states, including the states with moratoriums.

According to the Death Penalty Information Center, 17 people have been executed in 2022, all in Alabama, Arizona, Missouri, Oklahoma, and Texas, as of November 29. And as of April 1, over 2,400 people are on death row.

“The death penalty is immoral. It is an irreversible punishment that does not allow for correction; is wasteful of taxpayer dollars; does not make communities safer; and cannot be and never has been administered fairly and equitably,” Brown said.

LGBTQ activists and allies in San Antonio, Texas, turned a far-right attack on a drag show into an open-air party.

On Tuesday night, armed members of “This Is Texas Freedom Force,” which the FBI calls an “extremist militia group,” protested outside San Antonio’s Aztec Theatre as it hosted a drag show.

The protesters carried signs reading “Stop Groomers and Pedos,” while members of the San Antonio Family Association were also in attendance, waving signs reading “Marriage = Husband + Wife,” and “Honk for Marriage.”

But counterprotesters showed up in even bigger numbers on Tuesday, and according to Texas Observer reporter Steven Monacelli, they turned the night into a giant party.

A November report from GLAAD found that drag events faced at least 124 significant threats, just this year. Last week, another San Antonio venue, The Starlighter, canceled drag events for the rest of year due to safety threats and harassment.

Many of the far-right protesters on Tuesday came bearing arms, and so too did the counterprotesters, including a military veteran who sported a “FCK NZS” patch on his vest as he sought to support LGBTQ people.

In a basic sense, it’s obviously disheartening to see people take up arms against one other. No less while one side—whether by forced delusion from profiteering right-wing hacks or their own entrenched reactionary views—seeks to strip away fundamental civil rights from people.

On the other hand, the manner in which masses showed up to defend those whose rights are under attack is animating.

This kind of protest—one that presents a rejection of the restrictive and angry nature of reactionary conservatism—is profound. The counterprotesters, in their “open air party” allyship, showcased what can come from sharing compassion and love and radical empathy with people. That kind of joy can maintain a movement and can perhaps welcome others to join, even those who may have been seen as “too far gone.”

The Twitter account tracking Elon Musk’s private jet has been suspended, a month after Musk had promised not to ban the profile in the name of “free speech.”

Jack Sweeney, who ran the jet tracker, had told Business Insider on Sunday that his account had already been “shadowbanned,” meaning its visibility had been restricted. As of Wednesday, the account was fully removed.

Since Musk—a self-described “free speech absolutist,” except, apparently, when it comes to jokes at his expense—took over Twitter, multiple accounts have been banned for a variety of reasons.

Several comedians and actors were suspended for mocking the Tesla founder, while a few prominent liberal accounts were blocked (and ultimately reinstated) for no apparent reason.

But other forms of free speech have abounded under Musk. In the 12 hours alone following his chaotic Twitter takeover, use of the n-word increased almost 500 percent, according to the National Contagion Research Institute.

A report released Tuesday by Media Matters and GLAAD found that anti-LGBTQ rhetoric, particularly use of the word “groomer,” has shot up since Musk took the reins in October. Nine well-known anti-LGBTQ accounts saw a 1,200 percent increase in retweets of posts using the slur.

Meanwhile, mentions of a prominent pro-LGBTQ account in tweets using the slur rose more than 225,000 percent.

And Musk has restored accounts previously suspended for propagating violence, including former President Donald Trump and neo-Nazi Andrew Anglin.

Twitter has also dropped its Covid-19 misinformation regulations, and on Monday night dissolved its Trust and Safety Council, the independent advisory group formed in 2016 to address issues on the platform including hate speech, violence, and abuse.

It would seem Twitter is becoming less of a free speech haven and more of a “free-for-all hellscape”...which Musk also promised would not happen.

Sean Casten has no shame when it comes to climate advocacy.

In fact, the Illinois representative spent his Tuesday morning singing praises for the Federal Energy Regulatory Commission (FERC), to the tune of Rihanna’s “Work.”

“To my colleagues in the Senate, the eyes of the nation in this chamber are on you, we will never, no never, neglect you. We do not hold your past against you,” Casten urged the Senate, to a rhythm that would make Lin Manuel-Miranda blush. “But you need to get it done, done, done, done, done, done.”

“Mr. Speaker, what else can I say, I’m trying babe,” Casten finished, yielding to presiding Speaker Pat Ryan.

FERC oversees much of the energy sector, including interstate electricity transmission, hydroelectric project licensing, and natural gas and oil pipeline projects. Casten—who beat a six-term Republican incumbent in his district in 2018—was seeking to bring attention to the Senate failing to renominate FERC’s fifth commissioner, Chairman Richard Glick.

Biden had set a previous goal of a zero-carbon pollution power sector by 2035, and a net-zero emissions economy by 2050, something the Inflation Reduction Act puts America on track to approach. Massive electricity generation, transmission, and storage are needed to attain such goals. Without a fully-staffed FERC, it’ll be hard to meet them.

The danger is if any FERC decisions related to the energy transition are split 2-2, Casten told The New Republic. “The things that we’re trying to do, that capital markets are trying to do, to give us cleaner, more reliable, more efficient energy are now going to be stalled just for a bureaucratic reason because we didn’t appoint a commissioner. It’s an own-goal.”

“A deadlocked FERC would eliminate up to 80 percent of the emissions reductions created by the IRA,” Casten noted in his musical remarks Tuesday.

For months, the fate of Glick’s renomination has been up in the air. Senator Joe Manchin, who has enjoyed millions of dollars from coal companies he founded, chairs the Energy and Natural Resources Committee tasked with conducting hearings with FERC nominees. Thus far, the senator has refused to hold a hearing.

In March, Manchin did call a hearing, but only to reprimand Glick and the commission’s Democrats for requiring more information from natural gas projects about their economic justification and environmental impacts. And Manchin was further incensed after President Biden last month called to shut down coal-powered energy plants.

Manchin, who has spent months lobbying for permitting reform that would—beyond clearing the path for a natural gas pet project in his own state—ostensibly promote construction of new electrical transmission lines, is hindering the staffing of the agency that would oversee that reform. He moreover threatens the timely execution of the IRA, one of Biden’s most signature accomplishments.

Last year, Casten led a #HotFERCSummer campaign featuring House floor renditions inspired by Megan Thee Stallion, Fergie, and Dolly Parton to advocate for FERC-related legislation and to fill a previously empty FERC seat, which was completed in November 2021.

And his advocacy continues.

“Having had some degree of success to break the deadlock last time—just at the expense of humiliating myself on the House floor—I thought we’d try to do it again and cringe it up and do some more dad jokes and see if we can strike lightning twice.”

President Joe Biden on Tuesday signed a historic bill enshrining the right to marriage equality into law.

The Respect for Marriage Act, which applies to both same-sex and interracial marriage, would require that two people be considered married so long as their marriage was legal in the state in which it was performed. The act also repeals a 1996 law defining marriage as between a man and a woman, which has remained on the books despite being declared unconstitutional by the Supreme Court in 2015.

Many civil rights activists had warned that after the Supreme Court overturned Roe v. Wade in June, same-sex marriage may be next on the chopping block.

About 2,000-3,000 people attended the signing ceremony on the White House lawn, according to spokesperson Karine Jean-Pierre. The event opened with a performance by the Gay Men’s Chorus of Washington, D.C. The singers wore silver sequin scarves and sang “Harmony’s Never Too Late,” an original piece.

Senate Majority Leader Chuck Schumer highlighted how personal the bill is for him, as his daughter and her wife are expecting their first child. “Yes, this is about making life better for millions of LGBTQ Americans…but it’s also [for] the countless children and families who will be protected by this bill,” he said.

Outgoing House Speaker Nancy Pelosi highlighted the numerous wins for the LGBTQ community over the years, including the repeal of Don’t Ask, Don’t Tell at the end of her first term as speaker.

Musicians Sam Smith and Cyndi Lauper performed their respective songs “Stay With Me” and “True Colors.” Lauper opened her song by saying, “This time, love wins,” and punctuated the grand finale calling out, “Power to all the people.”

Gina and Heidi Nortonsmith, one of the seven couples who sued the state of Massachusetts for marriage equality in 2001, gave a speech celebrating how much progress has been made but acknowledging how much farther there is to go.

Finally, Biden stepped up to the podium. He thanked all the activists and members of the LGBTQ community whose work helped bring the legislation to pass.

“It’s one thing for the Supreme Court to rule on a case,” he said. “But it’s another thing entirely for the elected representatives of the people to take a vote on the floor of the United States Congress and say loudly and clearly, love is love. Right is right. Justice is justice. These things are fundamental things that America thinks matter.”

Biden also warned about the “extreme” Supreme Court, which rolled back the nationwide right to abortion and has threatened to do more. He decried the attacks on spaces that affirm gender and sexual orientation.

The House of Representatives voted 258-169 last week to pass the final bill to Biden’s desk. At least two Republican House members, Representatives Vicky Hartzler and Glenn Thompson, voted against the bill despite having LGBTQ family members.* Thompson had also voted against an earlier version of the bill this summer, just three days before attending his son’s same-sex wedding.

The Senate voted 61-36 two weeks ago to pass the bill. One of its opponents was Republican leader Mitch McConnell, who is in an interracial marriage.

Critics of the bill have said, though, that it does not go far enough with LGBTQ protections. Part of the amendment says that religious organizations do not have to marry same-sex couples, which would allow groups to continue to be homophobic, and the bill does not require all states to actually issue same-sex marriage licenses.

* This article originally misstated the voting records of Hartzler and Thompson.

Masses of rail workers across the country are rallying Tuesday in efforts to draw the public attention toward their demands, including giving rail workers paid sick days, after President Joe Biden signed legislation imposing a labor deal on workers.

Rallies are taking place in Colorado, Illinois, Iowa, Massachusetts, Michigan, Minnesota, Nevada, New Mexico, Ohio, Utah, Wyoming, and Washington, D.C.

“We demand that Biden sign an Executive Order that he apparently has the capacity to do and allow for 7 days sick time for RR workers like other Government contractors. Done, end of story,” a spokesperson for the Railroad Workers United labor caucus said in a statement to The New Republic. “Why not? And if he refuses, he owes us an explanation for sure.”

Workers are also asking for two-person crews on all trains and eliminating what’s known as “precision-scheduled railroading.”

Precision-scheduled railroading, or, as workers sometimes dub it, “positive shareholder reaction,” manages freight movement by the individual car level, as opposed to the whole train—ensuring train cars are constantly on the move. In practice, this has cut jobs, consolidated dispatch centers, and made trains less safe, as fewer workers have less time to conduct checks on even more train cars.

The rallies come after 72 members of Congress, led by Senator Bernie Sanders and Representatives Jamaal Bowman, Alexandria Ocasio-Cortez, and Rashida Tlaib, published a letter outlining how Biden could “guarantee rail workers the seven sick days that they desperately need through executive action.”

The letter followed Biden’s decision to impose a labor contract on workers, in an ostensible effort to avoid a national rail strike.

Despite Biden’s cave to railroad companies, these 72 members of Congress are not relenting.

“We are going to continue to fight. We are going to continue to organize. And we’re going to continue to make sure that labor—the workers who create the wealth for these companies—get their fair share of that wealth,” Bowman bellowed at the Washington, D.C., rally.

“We have corporations making record profits,” Bowman continued. “We allow them as many stock buybacks as they want. But we continue to give workers and labor the short end of the stick.… That’s bullshit.”

The consumer price index, or CPI, a key government measure of inflation, indicates that inflation finally seems to be slowing a bit, according to a report released Tuesday by the Bureau of Labor Statistics.

The index measures the monthly change in prices paid by U.S. consumers for specific goods.

Here are three things to know about the inflation report, and what it might mean looking forward.

1. It has some of the the lowest increases in almost a year.

Prices rose 7.1 percent in November compared to a year earlier. This is a big slowdown from October, which saw a 7.7 percent increase compared to the previous year, and the smallest yearlong increase since December 2021.

It may seem counterintuitive to celebrate a 7.1 percent increase, but overall, prices in November rose just 0.1 percent from the previous month.

Removing the price increases for food and energy, which are always volatile, even before the Covid-19 pandemic and the war in Ukraine, prices rose 0.2 percent in November. This is the smallest monthly increase since August 2021.

2. But inflation remains high in key areas.

A big contributing factor in the low price increases was energy. Prices for gasoline, natural gas, and electricity fell 1.6 percent from October.

But prices for food and shelter increased. In fact, they went up the most of any sector. Costs for groceries and eating out went up 0.5 percent, and housing costs rose 0.6 percent.

3. Will it affect the Federal Reserve’s decision on Wednesday?

The Federal Reserve begins its policy-setting meeting Tuesday and is expected to announce a 0.5 percent increase in interest rates. The new CPI report is unlikely to affect that decision any further, according to Dean Baker, the senior economist at the Center for Economic Policy and Research.

“The Fed is always worried about pulling surprises,” he explained.

The U.S. central bank is scrambling to achieve a so-called soft landing, or a decrease in inflation without tipping the economy into a recession. The labor market has remained strong overall, causing concerns that the economy has not slowed sufficiently to avoid a downturn. But Baker says a soft landing is “definitely” still possible.

“It is now indisputable that inflation has slowed sharply, without a big rise in unemployment,” he said. “It is not clear yet that it is at a rate that the Fed considers acceptable, but the rate clearly is much lower than it was earlier in 2022.”