People stand outside of their vehicles as they wait in line at a food distribution held by the Farm Share food bank, Wednesday, July 20, 2022, in Miami. Long lines are back at food banks around the U.S. as working Americans overwhelmed by inflation turn to handouts to help feed their families. (AP Photo/Lynne Sladky)
UPDATED 6:45 AM PT – Wednesday, July 27, 2022
The Federal Reserve is expected to impose another big interest rate hike as Americans continue to struggle with record high prices. Inflation has soared to 9.1 percent, which is the fastest increase in consumer prices in more than 40 years.
According to the Bureau of Labor Statistics, food prices are up 10.4 percent and the pain at pump has become more severe as gas prices increased by nearly 60 percent over the last year. As prices surge, so are the lines at food banks across the country.
“What we’re hearing from people and families is they’re making these decisions between filling their gas tank to get to work, paying the rent, paying utilities, other basic expenses and meeting their food costs,” explained Michael Flood, CEO of the Los Angeles Regional Food Bank.
Food banks are struggling to meet growing demand as more working Americans grapple with inflation and struggle with feeding their families. Flood said people are looking to pantries and distribution programs just “to try to make ends meet.”
Vanessa Correa, left, and Gigi Fiske, right, pass out gallons of milk at a food distribution held by the Farm Share food bank, Wednesday, July 20, 2022, in Miami. Long lines are back at food banks around the U.S. as working Americans overwhelmed by inflation turn to handouts to help feed their families. (AP Photo/Lynne Sladky)
This comes as the Federal Reserve is set to inflict more pain on the economy with another big interest rate hike in an effort to tackle skyrocketing inflation. Chairman Jerome Powell insisted the Fed is “committed to bringing inflation back down.” He even suggested they are “moving expeditiously to do so.”
Meanwhile, economists are expecting the Federal Reserve to raise interest rates by another three-quarters of a percentage point, further stoking fears of a recession. Chief Investment Officer Cresset Capital, Jack Ablin explained that the more persistent inflation is, the more aggressive the Federal Reserve has to be.
This comes ahead of the release of the second quarter GDP report, which is expected to show a contraction. Economists have pointed out a second negative quarter in a row would mean America is already in a recession.