Interest rates, inflation and the American consumer
The Federal Reserve is expected to cut interest rates this week for the first time in four years. It would be a major milestone in the central bank’s long fight to get inflation under control.
The Fed changes interest rates to keep inflation in check. But inflation is a complex phenomenon, and people have different ideas about what drives it.
“There’s a very widespread belief that higher interest rates lead to higher inflation. It’s puzzling to an economist, but I think one part of the reason is that it’s very easy to confuse correlation and causality,” said Stefanie Stantcheva, an economics professor at Harvard University.
On the show today, Stantcheva explains what Americans believe about the root causes of inflation and how the government should manage it, how views differ along party lines and the role media play in all of this.
Then, we’ll get into why retail companies have been pretty silent about shoplifting this year. Plus, the U.S. federal deficit keeps growing, but neither presidential candidate wants to talk about it.
Later, it’s only fitting that our hosts have pets with accidental economics-themed nicknames. And, comedian Rola Z, who hosts the “Funny Arabs” show in Washington, D.C., answers the Make Me Smart question.
Here’s everything we talked about today:
- “People’s Understanding of Inflation” from the Social Economics Lab at Harvard
- “The Fed And Public Opinion” from Forbes
- “What actually happens when the Fed cuts interest rates?” from Marketplace
- “No, Americans Are Not Completely Stupid About Inflation” from The New York Times
- “The Growing Use of Voting Before Election Day” from the Center for Election Innovation and Research
- “America’s stores are winning the war on shoplifting” from CNN Business
- “Federal Debt Is Soaring. Here’s Why Trump and Harris Aren’t Talking About It.” from The Wall Street Journal
- “How would Project 2025 impact troops and veterans?” from Military Times
We want to hear your answer to the Make Me Smart question. Leave us a voicemail at 508-U-B-SMART or email us at makemesmart@marketplace.org.
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