Animal Spirits Podcast The Fed is Making a Mistake (EP.252)
Apr 13, 2022
The discussion kicks off with a deep dive into rising interest rates and their impact on the bond market. The hosts debate the complexities of the wealth effect, contrasting experiences of economic strata. Navigating retirement finances and the housing market challenges reveals surprising insights about financial security. They also critique public perception of rising prices through survey skepticism. Alongside this, they touch on Elon Musk's Twitter antics and amusingly review films, blending finance with pop culture.
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Interest Rate Puzzle
- Interest rates have risen quickly across the board, especially on the shorter end of the yield curve.
- The rapid rise follows a period of puzzlingly slow rate increases despite high inflation.
Fed Mistake?
- Michael Batnick believes the Fed's aggressive rate hikes risk causing a recession.
- He prefers the current economic situation with higher wages and inflation to a potential recession.
Rising Wages
- Waffle House and Hoplot Brewing Company are offering high hourly wages.
- Walmart is now paying truck drivers up to $110,000 a year.
