Navigating Interest Rates and Inflation

This chapter examines the Federal Reserve's recent interest rate hikes and the historical context backing this strategy, particularly referencing the 2008 financial crisis and the subsequent quantitative easing. It discusses the challenges of balancing economic stimulus with the need for normalization, illustrated by the 'taper tantrum' episode of 2013. Insights from economists highlight the complexities of current economic conditions, where low unemployment does not necessarily align with rising inflation.