The Bitchuation Room with Francesca Fiorentini
@franifio·283K subscribers·2.7K videos
The Terrible Way Raising Interest Rates Stops Inflation
Posted
July 15, 2022
Views
820
Likes
117
Comments
9
July 15, 2022
820
117
9
15.37%
Every word spoken in this episode is indexed. Type any phrase to jump straight to the moment it was said.
Type any word or phrase that may have been spoken. Click a result to seek the player to that exact moment.
Try a name, a topic, or a quoted line
8:50Now PlayingHow would higher interest rates affect your life? The Fed has two broad mandates: to maintain full employment (by keeping the unemployment rate around 3-5%) and to keep inflation under control. Unemployment numbers are pretty good, but inflation is at 8.6%. Although it has a couple of tools at its disposal to tackle these issues, its most powerful one is setting interest rates, which has a cascading effect on everyday Americans’ ability to lend and borrow money.
Still, in order to combat record inflation, the Federal Reserve has started to rapidly increase their benchmark interest rate. This past week, it raised the benchmark rate by .75%, the most aggressive hike since 1994. This is technical, and boring stuff, so what does it mean in practical terms for people who aren’t large holders of capital? Economist Richard Wolff explains.
One very concrete effect from rising rates is that it’s much more expensive to borrow money. A few years ago, you could get interest rates on a mortgage or a car for very very very low rates. These days, the interest on those types of loans is multiple times higher than it was just prior to the pandemic. This will price out many more people from the housing market, depressing not only the market to buy homes, but to build new housing as well. The knock on effect from this can be catastrophic, and we only need to look back at 2008 to see how impactful the knock on effects from a housing crisis can be.
Richard D. Wolff is a Professor Emeritus of Economics at the University of Massachusetts Amherst. Follow Professor Wolff on Twitter
📸 Credit Manuel Balce Ceneta
Recorded July 10rd, 2022
Get your TBR merch
***************************
Independent creators rely on your support to create the content you want!
Become a Patron of The Bitchuation Room:
Tip the show:
Venmo: @TBR-LIVE
Cash-App: @TBRLIVE
Get your TBR merch: www.bitchuationroom.com
***************************
Thanks to Paige Omek, Alexandra Ornes, and Max Inhoff
***************************
Follow The Bitchuation Room on Twitter @BitchuationPod
Check Out The Bitchuation Room Podcast
Google Music
Find Francesca On:
YouTubeThe Bitchuation Room’s channel
Sentinel Indexing in Progress
Metadata and chapters are available. Claim extraction for this episode is pending.
All video content is delivered via YouTube embedded players in accordance with the YouTube Terms of Service. Sentinel provides research tools that promote discovery and accountability across political media.
