The Negative Effects of Interest Rates on Inflation

In Volcker's case, we went from effectively interest rate, real interest rates of zero to slightly positive to 6% positive. We're still negative in real interest rates today. And at the end of the day, inflation is still higher than interest rates in in pretty much any way you measure it. So one could make the argument that if the Fed really wanted to shock an off, and they really wanted to cause a recession, that what they would have had to have done is raise interest rates even higher.

Transcript

Play full episode

The AI-powered Podcast Player

Save insights by tapping your headphones, chat with episodes, discover the best highlights - and more!

Get the app