What Does Raising Interest Rates Really Do?

The United States hasn’t seen inflation like current levels since the late 1970s. The pandemic prompted unusually high levels of fiscal stimulus, including the rollout of relief through programs like the American Rescue Plan, which some have blamed for inflation. But our guest this week shares that increased economic relief isn’t really the biggest contributing factor leading to inflation. Author Matthew Klein points out that supply chain disruptions created by the COVID crisis, along with the war in Ukraine, actually explain the majority of the changes we’re experiencing. Klein has reported for numerous outlets including Bloomberg, the Financial Times and Barron’s. He joins WITHpod to provide a gut check on the economy and to discuss why he believes the Fed has raised interest rates, the role that supply and demand plays in global financial systems, the impact of monetary policy changes on economic recovery efforts and more.