The idea is that inflation affects everybody. And so we do need to have some short term pain in order to bring inflation down. But it seems like a relatively small group of consumers in our economy better off Americans who can live with these price increases and are willing to pay them. It just might be the case that it is harder to vanquish inflation in a world where rich people have so many savings.
In the struggle to control inflation, the Federal Reserve has raised interest rates five times already this year.
But those efforts can be blunted if companies keep raising prices regardless. And one industry has illustrated that difficulty particularly starkly: the car market.
Guest: Jeanna Smialek, a federal reserve and economy reporter for The New York Times.
Background reading:
- Many companies have been able to raise prices beyond their own increasing costs over the past two years, swelling their profitability but also exacerbating inflation. That is especially true in the car market.
- Inflation stayed far above the Federal Reserve’s goal in August, as prices climbed more quickly than economists expected.
For more information on today’s episode, visit nytimes.com/thedaily. Transcripts of each episode will be made available by the next workday.