TEXT OF INTERVIEW

Steve Chiotakis: The Federal Reserve wrapped up a pretty uneventful two-day policy session. The key interest rate stands at just a hair above zero. But with all the money it’s infusing back into the economy, the Fed is keeping a close eye on inflation. So’s the Treasury Department and Wall Street and Congress.

Economics correspondent Chris Farrell joins us now. Chris, we’re hearing this word “hyper-inflation” in the lexicon. What’s that all about?

Chris Farrell: People have different definitions, but it’s the worst of the 1970’s. So it’s double-digit inflation. And there’re just concerns because the Fed has been pumping the system full of money to try and turn this economy around. And you know, I just don’t see it. In the GDP report that came out this week, we saw that prices are stable. But I have to tell you something: now we have to make a little bit of a side tour here, but I just have to highlight a report that came out this week, Steve, because I still think it’s an amazing number. So the Fed Funds Rate, right, the benchmark interest rate is somewhere between zero and a 0.25 percent. I think it’s zero, so let’s say it’s zero, right? So the ideal, the perfect benchmark interest rate at this particular point in our history should be: -5 percent.

Chiotakis: Minus?

Farrell: Minus. Now —

Chiotakis: How do you go there? Does that mean they start giving you money back?

Farrell: Well, I would hope so. It’s pretty hard to get a negative interest rate, it’s pretty hard to get interest rates below zero. But this is a very well-respected measure, it’s called the Taylor Rule. OK, we’re not going to get -5 percent interest rates — you just can’t do it, it’s mind-boggling. But it does support the efforts by the Fed to be buying long-term Treasuries, to be buying debt, sort of to be doing all these extraordinary actions that they have been taking. And by the way, that’s going to be a big part of the discussion that they’ve had this week of continuing those extraordinary actions.

Chiotakis: All right. Our economics correspondent, Chris Farrell joining us this morning. Chris, thank you.

Farrell: Thanks a lot.