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“I think the one thing we really cannot do is to fail to restore price stability,” Powell told Kai Ryssdal.
In some ways, falling prices would actually be bad news for the economy.
Mortgage rates are rising, but deposit rates will lag, says Laurie Stewart, president of Sound Community Bank in Seattle.
All major indices are down for the year. That’s probably something the Fed isn’t all that mad about.
The Fed intensified its fight against the worst inflation in 40 years on Wednesday and signaled further large rate hikes to come.
Mortgage rates, for example, probably already have the Fed hikes built in.
The strategy is aimed at tightening credit and easing inflation. Purdue’s Cathy Zhang worries about the effects on financial markets.
Many have been on a borrowing spree through the past two years of low rates.
The Fed recently hiked rates by 25 basis points, and plans to raise rates several more times this year alone.
For monetary officials, the personal consumption expenditures gauge beats the CPI. A trip to the grocery store helps explain why.
