Catherine Rampell and Stephen Witt: Can We Avert Economic Disaster and the Robot Apocalypse?

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The Bulwark Daily 1h 15m 7 speakers 8 chapters transcribed 5 hours ago
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Why is the Fed raising rates and how will it affect inflation and mortgage costs?

Carine Torbey 0:00
Suomen suosituin autovakuutus korvaa arvattavat ja arvaamattomat vahingot. Osta autovakuutus osoitteesta lähitapiola.fi ja voit voittaa uudet renkaat. Palvelun tarjoavat LähiTapiolan vahinko- ja alueyhtiöt. LähiTapiola. Samalla puolella. LähiTapiolla samalla puolella.
Tim Miller 0:48
Hello and welcome to the Bulwark Daily. I'm your host, Tim Miller. We have a massive show today. It's a doubleheader. We're doing economics. We're doing AI. So I don't even have time to get to my guy, Thomas Massey, bringing the articles of impeachment against Peter Brian Hegseth. So go check out the next level. It's already up. We had Edgar in for Sarah Longwell. We get into impeaching Hegseth, other impeachment ideas that we have. and other political news of the day. On this show, in segment two, I bring in the author of a New York Times column titled, This is Really Bad, which is just squarely targeting us here at The Bulwark. You know, I mean, that is clickbait for me if I've ever seen it. This is really bad.
Tim Miller 1:28
It's about the AI vibe shift, and I think it's a worthwhile conversation, particularly if you're trying to make sense of the changing narrative and discussions around the AI threats. But first... She's the economics editor here at the Bulwark, author of the Receipts newsletter. And coming up on Friday, a new podcast also called Receipts. It's Catherine Rappel. What's up, Catherine?
Catherine Rampell 1:51
Hey, thanks for having me back.
Tim Miller 1:53
All right. Welcome. The new pod is going to be in its own feed. So people are going to have to go get that. Go sign up on Friday. Make a little note for yourself right now. And we're really excited about it. What's going to be happening on the pod? Do you have any little teaser for people?
Catherine Rampell 2:08
For this week, well, we shall see what happens with the Fed today. We're recording this. I should let our audience know before the Fed announces what it's doing with rates. It's probably going to raise rates today on Wednesday. And my expectation is that the president will flip out when that happens, but I don't know. But assuming that that happens, I think that'll probably eat up most of the conversation like for the next week. So we'll be talking about plenty of that stuff and other crypto scams and various other things happening
Tim Miller 2:42
in the world. A lot of great economic news. We'll do a little teaser of it right now. Let's talk about the potential state of play. I mean, you said kind of what we think is the baseline expectation for the Fed. But just kind of backing up for people, why does the Fed feel in this moment that they need to raise rates? I mean, we're going to get into sex, but bond rates, mortgage rates already going up, you know, for reasons... unrelated to what the Fed is doing.
Bruno Satin 3:05
Sort of related,
Tim Miller 3:06
yeah. What is it about what's happening in the economy that is going to lead the Fed to raising rates?
Catherine Rampell 3:11
Well, we've had high inflation for over six years at this point. We have a new Fed chair who most of his life has been an inflation hawk, meaning that he has a bias towards raising rates higher and to deal with inflation. That's usually the prescription for dealing with inflation is higher short-term interest rates. So if you take him at his word that he deeply believes that the solution for inflation, for getting stable prices, which is the Fed's responsibility, is tighter monetary policy, which he criticized his predecessors for not having. If you think that he deeply believes that and he wasn't just saying it for political reasons while there was a Democrat in the White House, that is what you should expect the Fed to do today.
Catherine Rampell 3:56
And he basically said as much in a recent speech where he kind of boxed himself into a corner where he told markets more or less like, unless we see something, some kind of major improvement on the inflation front in the next few weeks, it's up to the Fed to deal with it.
Tim Miller 4:14
How do you think you're balancing? I mean, at some level, inflation has been high, but it came down. I mean, it depends on kind of which sector we're talking about. Obviously, we're seeing a ton of energy inflation, but there's some external reasons for that.

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