Capital Ideas Podcast
Fed watch: Is inflation under control yet?
Nov 23, 2023
An economist examines the Fed's battle with inflation, predicting their actions on interest rates in 2024. The challenges and consequences of the Fed's target inflation rate are explored. The podcast also analyzes the Fed's reaction to disinflation and the likelihood of a recession. Expressions of gratitude and sponsor acknowledgement conclude the podcast.
14:18
AI Summary
AI Chapters
Episode notes
Podcast summary created with Snipd AI
Quick takeaways
- Wage inflation is expected to remain high relative to the Fed's 2% target due to the tight labor market and worker reluctance to accept low pay increases.
- Despite expectations of a recession being necessary to bring inflation down to the Fed's 2% target, the timing of a recession remains uncertain.
Deep dives
Inflation Decline and Sticky Inflation
The podcast episode highlights the decline in inflation over the past year, but the speaker believes it is too early to declare victory. Despite wage growth slowing down, the tight labor market and worker reluctance to accept low pay increases suggest that wage inflation will remain high relative to the Fed's 2% target. Additionally, there are inflation pressures in the medical care sector, even though the CPI currently does not reflect it. Overall, the pace of disinflation is expected to slow down, potentially keeping inflation above the Fed's target.
Remember Everything You Learn from Podcasts
Save insights instantly, chat with episodes, and build lasting knowledge - all powered by AI.
