Economist Podcasts Powell to the people: The Fed raises rates
Jun 16, 2022
Simon Rabinovich, U.S. economics editor for The Economist, discusses the Federal Reserve's unprecedented 0.75% rate hike aimed at tackling inflation without provoking a recession. He explores the complex interplay of global factors affecting the economy. Shashank Joshi, Defense editor, analyzes the implications of Ukraine’s war on military technology, pondering the future relevance of tanks amidst evolving threats. Together, they highlight the cultural impact of wartime anthems that uplift spirits and resonate with the enduring resilience of the Ukrainian people.
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Fed's Rate Hike
- The Federal Reserve raised interest rates by 0.75%, the largest increase since 1994, to combat inflation.
- They face the challenge of curbing inflation without triggering a recession.
Unexpected Rate Hike
- The Fed's rate increase was a surprise compared to earlier guidance, highlighting their need to be nimble.
- Recent inflation reports and rising inflation expectations influenced this decision.
Concerning Inflation Data
- The consumer price index in May reached 8.6%, the highest since 1981, exceeding expectations.
- The concerning factor is the accelerating month-on-month momentum of price increases.