American consumer spending is going strong. That’s a big plus for the economy. But job growth has stalled. That’s bad news. Add election anxiety to that, and the Federal Reserve — now considering an interest rate hike — is in what’s known as a pickle.
The Fed’s been dropping hints suggesting it’s maybe going to raise interest rates, but maybe now’s not a good time. Peter Conti-Brown, who studies central banking at the Wharton School, notes interest rates have been close to zero for almost a decade.
“The fact that we’re seeing a multiyear conversation inside and outside the Fed tells us just how complicated and uncertain this interest rate environment is,” he said.
There are mixed economic signals to interpret. But Lawrence Mishel, president of the left-leaning Economic Policy Institute, thinks the concern is simple — raise interest rates and it puts the brakes on economic growth. The problem is that not everyone has benefited from the growth so far.
“There are disadvantaged workers, communities of color, that still have very high unemployment,” he said.
Until wages grow at a faster rate, Mishel said, there’s nothing wrong with being cautious.
If you’re a member of your local public radio station, we thank you — because your support helps those stations keep programs like Marketplace on the air. But for Marketplace to continue to grow, we need additional investment from those who care most about what we do: superfans like you.
Your donation — as little as $5 — helps us create more content that matters to you and your community, and to reach more people where they are – whether that’s radio, podcasts or online.
When you contribute directly to Marketplace, you become a partner in that mission: someone who understands that when we all get smarter, everybody wins.