Fed officials speak up on inflation
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Wanna know what the Fed is thinking about interest rates in the economy? Some officials are more open than others. From American Public Media, this is Marketplace.
In Denver, I'm Amy Scott, In for Kai Rizdal. It's Thursday, September 24th. Good to have you with us. If you've been listening to this show so far in the Kevin Walsh era of the Federal Reserve, you know that the current Fed chairman likes to hold his cards close to the vest. He's been clear he thinks Fed officials have tipped their hands too much in the past about their future plans for interest rates. The Feds speak this is known as forward guidance, but Walsh hasn't been able to keep everybody else quiet, especially this week. Marketplace's Nancy Marshall Genser starts us off with more on what other Fed officials have been saying and why it matters.
Just two days after the Federal Reserves meeting last week, where officials voted to raise interest rates, Kansas City Fed President Jeff Schmidt said the Fed has work to do on inflation. Then yesterday Fed Governor Michael Barr said this.
Inflation is above our two percent target. and not clearly trending toward target in a timely way.
We heard from several more Fed officials today, including New York Fed President John Williams. He said it's reasonable to think another rate hike may be appropriate by the end of the year. Danielle DiMartino Booth, CEO at QI Research, is not surprised by the cavalcade of Fed chatter. There is no corralling Fed speakers. None zero zippo. DiMartino Booth says some Fed officials are openly advocating for a rate hike. Others want to see how upcoming inflation data plays out. Sarah Binder, senior fellow at the Brookings Institution, says all these comments from people at the Fed can smooth the way for future interest rate decisions. That's how the Fed moves interest rates. It's through transparency, communication.
Nationwide financial market economist Orin Klachkin says. These Fed speakers realize they can no longer act as though inflation caused by high oil prices and tariffs is temporary.
Supply side shocks that are not just you know these kind of you know one off things and that they're also lasting for longer.
Klatschkin says last week's interest rate hike may not be enough to cool the economy and beat back inflation. He expects two more rate increases this year. I'm Nancy Marshall Genser for Marketplace.
What are Fed officials saying about inflation and future rate hikes?
On Wall Street today, more drama in the bond market. We'll have the details when we do the numbers.
The number of people filing for first time unemployment benefits fell last week, another sign that the job market is holding up pretty well overall. The Labor Department said today the four week average fell to just over two hundred two thousand near fifty year lows. And we'll get more data on layoffs early next week when the job openings and labor turnover or Jolt survey comes out for August. When people do get laid off, odds are they're switching to an entirely different job. That's according to the career transition company LHH, which tracked more than 400,000 layoffs and found that 58% of those workers moved into different jobs or even industries. That percentage hasn't changed much over the past few years.
What has changed is why marketplaces Kaylee Wells
Through the
findings.
Once upon a time, as in the mid twentieth century, the job market was more centered around manufacturing and construction. So it was more cyclical, says Guy Berger, with the Burning Glass Institute.
And so you have these layoffs and then eventually the inventories roll down and you start producing stuff again. People get recalled back to work.
He says by the nineteen nineties that cyclical job market was pretty much gone. And so now
you have these permanent layoffs where like you lose a job. And the job's gone.
So more often, unemployed people have to find something different. Today, careers they are most likely to leave include customer service, logistics, and office support.
It's largely due to the digital transformation that companies are going through and and a lot of the AI disruption.
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