Isn't this just a sign that the Fed's tamping-down of inflation is working?
Their plan to curtail inflation has always been demand destruction. Which means callous layoffs, unemployment, and misery for the workforce. We are just now seeing the effects, so expect it to get worse from here. We are a few more earnings misses, fumble of the debt ceiling, and another bank collapse away from a depression.
Callous or otherwise, demand was outstripping supply during the pandemic years. Supply could only increase if actual value could be exchanged to pay for it, but we were in a situation where not enough new value was created, and our currency inflated at the same time a lot of people demanded what was in limited supply. E.g., regardless how many inflationary dollars you were willing to pay for it, you still couldn't get a PS5. The supply has still not increased, because dollars are worth less (because everyone has more of them). So cutting demand by making dollars more expensive is the only rational decision. Anything else would be chasing a dragon down an inflationary spiral.
Tl;dr, not everyone can own the newest thing, (because there are fewer of those things than the dollars in circulation) and in order to make the value of dollars reflect that, you kind of have to chop down the demand side by making dollars more valuable / harder to obtain.
The opposite approach is exemplified by the well-meaning but catastrophic attempts over and over in countries like Argentina and Venezuela to fix prices on the supply side to enforce artificial value on an already inflated currency. It's a fool's errand.
When people say their dollars are worth less, the most obvious way to rectify that is to get other people to stop bidding prices up on shit they don't need which they're putting on credit. The only way to do that without further restricting supply is to make credit more expensive.