This the rate change, and why it

This essay is meant to determine the appropriate use of data in a business editorial.

The name of the chosen report is “Fed raises interest rates and signals faster hikes on the way”. The writers are Donna Borak, Matt Egan, and Kathryn Vasel. The report is based on the Federal Reserve increasing the federal funds rate. It talks about the inflation and unemployment rates, along with discussing the negative effects of the rate change, and why it is a good idea. While the creators of this article intended to agree with Chairman Jerome Powell’s assertions, they did not succeed.The authors of this piece of writing do not use the data to appropriately portray their stance on the Federal Reserve raising interest rates or the effects that it will have.

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On the surface, it appears that the writers agree with the Federal Reserve Chairman Jerome Powell about how raising the benchmark rate shows how strong the current economy is. They show this in the subtitle that mentions the economy heating up. However, the article contradicts Mr. Powell in multiple places, so it does not make a compelling case for or against his statements. For example, the authors note that inflation is climbing higher, and then quote the Chairman’s claims that it is low (Borak, Egan & Vasel, 2018). This discrepancy is based on the rate being at its highest in six years.

The current inflation rate, according to the Federal Reserve’s method of calculation, is 2.3% (BLS, 2018). This is over the Reserve’s preferred 2%. Merriam-Webster defines inflation as “a continuing rise in the general price level usually attributed to an increase in the volume of money and credit relative to available goods and services” (Inflation, n.d.

). Many people believe that inflation is bad for the economy due to the dollar seeming to be worth more, whilst being able to purchase less because everything is more expensive.Another example of where the authors’ assertions differ from Mr. Powell’s is when they say that unemployment is down, but he says companies are reporting that they are putting a pause on hiring people (Borak, Egan, & Vasel, 2018).

What the article does not mention is what industries are implementing the hiring freeze. It cites the tariffs on steel and aluminum as the reasoning behind the break, but as those have many uses, it leaves the reader to speculate. This missing data is significant because it changes how the unemployment rate, which Mr. Powell says does not reflect the hiring freeze, is relevant to the situation. However, the article goes into how it is mainly the unemployment rate that is the main factor contributing to the push to keep increasing the rate and the improvement of the economy.In addition, according to the article, one of the effects of raising the benchmark rate is that the costs of borrowing money also go up.

Therefore, obtaining a mortgage, a credit card, and investing in stocks, bonds, real estate, and companies becomes more expensive and riskier (Amadeo, 2018). This causes a domino effect of fewer homeowners, more people in debt, and many businesses becoming unable to begin or expand. These consequences do not coincide with the prerogative that the economy is good.This essay has determined that the data usage in this report is not appropriate for the standpoints presented. The writers failed to properly utilize the data to agree with the Chairman of the Federal Reserve, Jerome Powell.

The piece reviews information about the inflation rate, the unemployment rate, the downsides of the Federal Reserve rate increase, and why elevating it is a promising idea.


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