The Fed has already done a lot of rate increases. It's clearly signaled that it's going to do some more. The big question is, does it keep pushing them higher and higher and higher until something breaks? Or does it start to see signs that momentum is slowing and it doesn't have to do that? And I think that's a question for probably the next 60 to 90 days.
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.