The Fed Raised Rates. Here's What It's Fighting. | Off The Clock
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Why does the Fed’s unanimous 12‑0 vote matter more than the rate hike itself?
So this is the story that's the good news story, which is basically he lied to a bad present in order to act responsibly in the job.
I'm fine with that. Like I
It's deeply undemocratic, but if the alternative is letting a charlatan run monetary policy badly and he's n own narrow political interest, I'm with you, Stacy. The work week may be over, but the economy it never takes time off. I'm Justin Wolfers, I'm a professor of economics, and I am joined by By America's favorite economics journalist, Stacey Vanning Smith.
Hi, Justin. I am a columnist at Bloomberg Business Week, co-host of the podcast Everybody's Business, and very happy as always to be here off the clock with you.
And this is indeed off the clock, the time when we slow down, look back at the week that was. Try to sort out what really mattered, what you can safely ignore, and maybe we'll find a few threads of golden goodness along the way. Let's get into it. Packed show today, Stacy. I want to talk about the Fed.
Big week for the Fed.
You told me you wanted to talk about affordability.
Well, I think the affordability is really important because of course one of the big issues the Fed is looking at is inflation. And inflation is one of the areas where we see economics in real time at the grocery store, at the gas pump, everywhere.
I don't think you're alone there, mate. Um, and then we're going to hit a special chart versus chart. I can give up my end of it. I'm gonna say that we're gonna end this, end the show with a really deep dive into what's going on with Canada and how our Canadian friends are feeling because I think it's a very, very important story for thinking about US-Canadian trade relations going forward. Stacy, any hints for how your runner-up chart is gonna
I will say this, it is not a nothing burger.
A tiny little something burger. You your chart Watch this for economic smack talk. Is the equivalent of Scott Bessant taking six billion dollars? To the bond market.
Oh, I am the house.
It sounds like a lot. But really? Awfully close to a nothing burger.
These are these are very strong words coming from someone who I think did not win chart versus chart last week.
Or the week before. It's been a rough week, which is why at this end of uh of our show o of off the clock, we have been putting in the hours and I brought the brought the bazooka.
Okay. The rain ends this week.
Yeah.
We'll see.
Uh Okay. The Fed. What do you want to get into?
Oh my gosh. Well, the big thing was so Wednesday, as you said in our last conversation, bring the popcorn. This was such a huge moment for the Fed. Everybody was kind of waiting with bated breath. I think to see which way the vote would go and also to see what Kevin Walsh would do in the face of a lot of pressure from Trump to cut interest rates as inflation was rising.
Most important question what kind of popcorn did you bring?
Um, I brought the cheapest possible popcorn because inflation is rising at uncomfortably high levels, Justin, as you well know.
Okay. Well, for me this was a day to spoil myself because you don't get days like this very often. You don't often walk into a Fed meeting without knowing what's gonna happen, but I wanna compliment Silent Kevin because Silent Kevin He's he's managed to keep some interest in this series. The the problem about Jay Powell, the previous Fed chair, is Jay Powell would just tell you what he's gonna do. And he'd tell you his feelings. He'd tell you his thoughts. And so when it came time, you know, at the end of every good soap opera, there's a like next week on
Cliffhanger. Yes.
Yeah. Well, silent Kevin. Understand you can't say next week the following seven things will happen. You have to leave a curiosity gap and there was all sorts of curiosity there. What were you curious about?
The thing that stuck out to me was the word unanimous. So 12 members of the Federal Reserve vote on the Federal Open Market Committee vote on interest rates. And the thing that really stuck out to me was that it was a unanimous vote to raise interest rates, which struck me, and I'd love to run this by you, it struck me as very significant.
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Chapters
8 chapters
1
Why does the Fed’s unanimous 12‑0 vote matter more than the rate hike itself?
0:00–7:39
2
What does “Silent Kevin” Walsh’s vote reveal about Fed independence?
7:39–14:42
3
How is the Fed’s decision linked to the current affordability crisis?
14:42–22:34
4
Do feelings and consumer sentiment matter as much as hard data?
22:34–30:04
5
How does the bacon‑cheeseburger chart illustrate global price pressures?
30:04–37:33
6
What are Canadians really feeling about the U.S. trade war?
37:33–44:19
7
What is fiscal dominance and why could it cripple future borrowing?
44:19–51:18
8
Why would a 1 % interest‑rate target spark inflation, according to the host?
51:18–58:17
Speakers
2 identifiedMore from Platypus Economics with Justin Wolfers
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Vote Republican, Get $5,000? | Diving In