Just how high will interest rates go?

Apr 13, 2022
We don't know. But the Taylor principle says rates should increase at least to the level of annual inflation to control rising prices.
Among the Federal Reserve's biggest challenges is quelling consumer expectations of high inflation.
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Why taming inflation can take so long

Apr 12, 2022
There's a "long and variable lag" between monetary policy starting to control inflation and inflation responding in a substantial way.
Even with the Fed's interest rate hikes, curbing inflation might take a year, or even two.
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The Fed's interest rate hike is already reducing demand for mortgages

Apr 7, 2022
Getting demand to soften is the point because that's expected to help tame inflation.
Applications for home mortgages and loan refinancings are slowing down. Will inflation follow the trend?
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The Fed will sell some of the bonds it's been buying in an effort to cool the economy

Apr 6, 2022
Selling the Treasury and mortgage-back bonds on its balance sheet helps the central bank raise interest rates.
According to its March meeting minutes, the Federal Reserve will start selling $95 billion worth of bonds per month.
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Why it's so hard to agree on the causes of inflation

Apr 4, 2022
As inflation hits 40-year highs on several key metrics, not all economists agree on the causes.
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Another cure for inflation? Making markets more competitive.

Apr 1, 2022
Companies facing few competitors can hike prices more easily than those in competitive markets.
"I like to say that we're not doing something new, we're doing something that people have done for thousands of years, which is use everything that's grown and not throw it out," says Anna Hammond, founder of Matriark Foods.
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What does it mean when the Federal Reserve uses its “tools”?

Mar 29, 2022
The Fed’s tools can only go so far. “All of this activity relies on the other institution at the end of the transaction,” said economics professor Nina Eichacker.
Fed Chair Jerome Powell speaking last week at the NABE Economic Policy Conference. "We aim to use our tools to moderate demand growth, thereby facilitating continued, sustainable increases in employment and wages," he said.
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For public good, not for profit.

Can the Federal Reserve squeeze out inflation without squashing growth?

Mar 21, 2022
Bringing the economy in for a "soft landing" — taming inflation without bringing on a recession — has proven difficult for the Fed in the past.
The Federal Reserve isn't always successful at taming inflation while avoiding a recession. Plus, the pandemic and war in Ukraine make the Fed’s job more difficult.
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Is a recession in the cards?

Mar 17, 2022
Fed chief Powell called the risk of a recession “not particularly elevated." But some economists think he’s overly optimistic.
Economists' views on the likelihood of a recession are mixed while the Federal Reserve tries to navigate a challenging economic and geopolitical environment.   
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Federal Reserve lifts interest rates a quarter point

Mar 16, 2022
Citing high inflation and the tight labor market, Fed Chair Jerome Powell announces the first rate hike since 2018.
Powell: The Fed is "committed to bringing inflation back down and also sustaining the economic expansion.”
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