28 Jul 2022 09:45

How Expecting Inflation Can Actually Create More Inflation

To fight historic levels of inflation, the Federal Reserve this week, once again, raised interest rates, its most powerful weapon against rising prices.

The move was intended to slow demand, but there was also a psychological factor: If consumers become convinced that inflation is a permanent feature of the economy, that might become a self-fulfilling prophecy.

Guest: Jeanna Smialek, a correspondent covering the Federal Reserve and the economy for The New York Times.

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