Tuesday, Oct. 4, 2022 | 2 a.m.
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The Fed is desperately trying to slow inflation by raising interest rates repeatedly. But each time they raise the rate, the stock market sinks like a stone.
Sure, prices are higher due to inflation. Gas costs more, food costs more. But the loss of personal wealth most Americans are enduring every time stocks fall is much worse than a 25-cent increase in a gallon of gas.
Many people with savings have their money in the stock market by way of retirement accounts or investment accounts. So with the market falling almost 20% this year, they have lost thousands of dollars. That hurts more than an increase in the cost of a loaf of bread.
The Fed needs to forget about fighting inflation. Killing the economy and destroying everyone’s savings to defeat inflation is sort of like destroying a village to save it. It was a bad idea in the 1960s, and it is a worse idea now.