Ones and Tooze The Fed Interest Rate Hike
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Jun 17, 2022 The podcast delves into the recent record-high inflation and the Federal Reserve's largest interest rate hike in nearly three decades. It explores the implications of these economic shifts and potential strategies for the Biden administration. The hosts also examine Colombia's upcoming presidential election, where a leftist candidate could bring significant change. They discuss Colombia's history of right-wing economics and analyze Gustavo Petro's proposals aimed at addressing income inequality and social issues, marking a pivotal moment for the nation's future.
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US vs. Europe Inflation
- US inflation is marginally higher than in the Euro area, slightly exceeding 8%.
- It's more entrenched in the US, impacting decision-making, with wages lagging less behind inflation.
Wage Growth Differences
- US wages are lagging behind inflation but are rising faster compared to Europe.
- This is due to individual bargaining power in a recovering US labor market, not stronger unions.
Fed's Loose Policy and Inflation
- The Fed's loose monetary policy since 2008, including QE, aimed to stimulate the economy by inflating asset markets.
- Current anti-inflation policy may involve inflicting damage on these inflated assets to curb consumption.