The Daily Why Is It So Hard to Hit the Brakes on Inflation?
17 snips
Oct 6, 2022 
Jeanna Smialek, a Federal Reserve and economy reporter for The New York Times, dissects the challenges of controlling inflation in the U.S. She explains how aggressive interest rate hikes clash with corporate pricing strategies, particularly in the car market. The conversation reveals the impact of COVID-19 on supply chains, leading to inflated auto prices. Smialek's insights highlight the complexity of balancing economic measures amid changing consumer behaviors and inflationary pressures.
AI Snips
Chapters
Transcript
Episode notes
Inflation and the Fed's Response
- The Federal Reserve is aggressively raising interest rates to combat inflation.
- This strategy aims to curb spending and lower prices, but its effectiveness has been limited.
Corporate Pricing Power
- Companies are hesitant to lower prices because they've grown accustomed to higher profit margins during the pandemic.
- Strong consumer demand, fueled by savings and government stimulus, allowed companies to increase prices beyond rising costs.
Consumer Price Sensitivity
- Despite the Fed's efforts and easing supply chain issues, consumers remain less price-sensitive than anticipated.
- This allows companies to maintain high prices, posing a challenge to inflation control.