As reported by Bloomberg, El Salvador’s President Nayib Bukele has asked Federal Reserve Chairman Jerome Powell to stop printing money so much.
President of El Salvador Nayib Bukele issued a statement on December 1, following a Bloomberg article that quoted Federal Reserve Chairman Jerome Powell. Bukele asked for the chairman to stop printing so much money.
The new variant of the Covid-19 virus, Omicron, was announced last week by the World Health Organization. This virus has led to a new round of economic anxiety and has caused a breakdown in global trade.
Bloomberg reported on the Fed Chairman’s remarks before the Senate Banking Committee on November 30. Both Democrats and Republicans, according to the report, have expressed concern about rising prices and volatility in the markets. The Fed chairman maintained that there were no significant threats in the current economic climate despite increased uncertainty.
In addition, he urged the Federal Reserve to begin winding down its bond-buying programme by the end of 2022.
He also coined the term “tapering,” which refers to the steady reduction in stock and bond acquisitions. The central bank is basically creating money to purchase bonds, which are now at 0.25 percent to cut interest rates.
Economic growth and expenditure are boosted by lower interest rates, which encourage greater borrowing. Bukele’s words today are based on the fact that creating money promotes inflation, which eventually devalues the currency.
Federal Reserve Bank of St. Louis (FRED) economic analysis shows that the five-year inflation threshold surpassed 3% in November, the highest level in two decades. Since food and energy prices have increased, the Consumer Price Index for All Urban Consumers (Core CPI) has also hit an all-time high.
Despite what the Federal Reserve asserts, these numbers show that the current economic condition is not “temporary.” The newest Omicron variant might exacerbate America’s financial woes. Even more so if it spreads and further lockdowns are implemented.