Sometime this year the country may begin paying the price for decisions by the Federal Reserve Board to slow down the economy by raising key interest rates predicts Jeff Faux, director of the Economic Policy Institute.

Faux said we can expect an increase in joblessness and a weakening of the bargaining power of low- and middle-income workers.

In addition Americans will see higher housing and consumer credit costs, and a worsening of the trade deficit.

The Federal Reserve Board has raised its key interest rate over a percentage point since June 1999, and it has indicated it will continue to raise rates until economic growth slows down.

Fed chairman Alan Greenspan has defended the Fed’s decision to push up interest rates arguing that will prevent the economy from overheating and deflate the overpriced stock market, thus preventing a future crash.

But Faux, who says the Federal Reserve has other ways to deflate the stock market, concludes that the Fed’s decision to raise interest rates has been aimed more at preventing wage increases than at preventing inflation.