Another round of stimulus check may come as lawmakers urge to ease the Americans’ struggle amid continuous rising inflation.
Consumers in the United States have been dealing with inflation since the second part of 2021. And by this point, many people have relied on stimulus checks, incurred credit card debt, or fully emptied their funds to put food on the table and pay vital bills.
Inflationary Pressures Rise
The Federal Reserve seeks to lower inflation by raising interest rates, not to induce a recession that would devastate Americans in multiple ways. The Federal Reserve does not want a widespread recession.
Customers in the United States have been dealing with inflation since the second part of 2021. And by this point, many people have depleted their savings or are severely in debt as a result of utilizing credit cards to pay for necessities such as food and essential expenses. As of February, the yearly rate of inflation was 6%, according to the Consumer Price Index.
This is a rise when compared to mid-2022 when inflation reached 9.1%. The Federal Reserve wants inflation to be at 2%, but we’re not even close. The Federal Reserve raised interest rates for the first time this year in February, and it did so again earlier this week. The combined rate rise for 2023 was 0.25%. However, since the Fed began raising interest rates in early 2022, borrowing costs have skyrocketed.
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Stimulus Check Helps Struggling Americans
Historically, politicians have utilized stimulus checks to support the economy during prolonged downturns. The American Rescue Plan, for example, put $1,400 stimulus payments into consumers’ bank accounts in March 2021, at a time when manufacturing operations were slowing down.
These stimulus payments are being blamed for fueling inflation. A recession could develop if the Federal Reserve raises interest rates, causing a major drop in consumer expenditure. Furthermore, if the recession is severe enough, the federal government may grant additional stimulus aid.
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