Vox Sentences - Hiking interest rates to curb inflation

The Federal Reserve hikes interest rates in an attempt to bring down costs; Turkey faces 70 percent inflation.

Tonight's Sentences was written by Jariel Arvin.

The Federal Reserve hikes interest rates to curb inflation

Win McNamee/Getty Images

• The Federal Reserve raised interest rates by half a percent on Wednesday — its most significant increase since 2000 — to curb inflation and bring relief to Americans facing higher costs. [Associated Press / Christopher Rugaber]
• “Inflation is much too high, and we understand the hardship it is causing,” Fed Chair Jerome Powell said Wednesday. [Politico / Victoria Guida]
• Higher interest rates make borrowing money for mortgages, car loans, and credit cards more expensive. The Fed hopes that higher costs will reduce consumer spending, cool down the economy, and ultimately lower prices for essentials. [Washington Post / Rachel Siegel and Abha Bhattarai]
• However, there’s a risk that higher prices could reduce consumer and business spending so much that it leads to recession. With more interest rate hikes expected this year, the Fed will need to do so in a way that doesn’t drag down the economy. [CNBC / Jessica Dickler]
• But even if the Fed gets it right, the war in Ukraine and Covid-19 restrictions in China, which have already raised prices for gas and goods, could push inflation higher. [New York Times / Jeanna Smialek]

Inflation in Turkey hits a two-decade high of 70 percent

• According to data released Thursday, Turkey’s annual inflation rate hit 70 percent in April, the highest in two decades. [BBC]
• Food, transport, and non-alcoholic drinks saw the biggest increases from March to April. Turkey has offered some families tax cuts and energy subsidies to reduce inflationary pressures, but it hasn’t worked. [Al Jazeera]
• Critics say that’s because Turkish President Recep Tayyip Erdogan refuses to raise interest rates, which could ease inflation. Instead, Erdogan insists on keeping rates low to spur growth and exports, against traditional economic thinking. [AP]
• With presidential and parliamentary elections coming up in just over a year, Erdogan is under pressure to directly counter inflation. [Reuters / Daren Butler and Ali Kucukgocmen]

Roughly 15 million people died worldwide as a result of Covid-19 during the first two years of the pandemic — an excess death count three times higher than the official Covid-19 death toll. [CNN / Carma Hassan]

• If the Supreme Court overturns Roe v. Wade, medication abortion will likely become the next battleground between states. [NYT / Pam Belluck and Sheryl Gay Stolberg]
• Walgreens and Florida reached a $683 million settlement over the pharmacy chain’s role in the state’s opioid epidemic. [Forbes / Bruce Japsen]
• President Joe Biden declared a disaster area in New Mexico as firefighters slow wildfires burning since April. [Guardian / Gabrielle Canon]

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