US announced threat of recession and rising unemployment in the country
Against the background of an increase in the key interest rate, the United States may face a recession and an increase in unemployment – as stated by an American politician, candidate for Governor of Kentucky Geoffrey M. Young, in his talk with the Soloviev Live channel
“The budget policy is aimed at reducing inflation in the United States, and this often leads to a recession, which reduces economic activity and increases the unemployment rate. This model has existed since the country was founded. Accordingly, there is a kind of balance here that needs to be observed. However, in recent decades, we have seen that the Federal Reserve System (FRS) has kept the interest rate at a very low level – practically at zero rate, or at least close to that level,” the American politician said.
According to Mr. Young, the attractiveness of the Dollar as a reserve world currency is now falling, “The FRS believes that it is necessary to raise the interest rate, as fewer people will invest in US Treasury bonds. Fewer countries are investing in the Dollar now, so the interest rate must rise to cope with the current economic situation. This is leading to a recession. The unemployment rate will increase as a result.”