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Ryan Knutson: And lately you could say the Fed has slammed the brakes, dumped the punch down the drain and canceled Halloween. In order to tame historic inflation, the Fed has dramatically raised rates. Its benchmark interest rate was close to zero at the beginning of this year. Now it's over 3%, and the Fed has to decide how much higher rates will go.
Ryan Knutson: Welcome to The Journal, our show about money, business and Power. I'm Ryan Knutson. It's Monday, October 31st. Coming up on the show, the debate within the Fed about just how high interest rates should go. For most of this year, the Fed has been raising interest rates at a fast and furious pace.
Ryan Knutson: Fed officials have been unanimously passing big rate increases for months. They've all agreed that rates needed to go up fast, but recently, Nick says some Fed officials have started building a case for a different approach, a slower, steadier approach to raising rates. Nick Timiraos: You don't want to over correct, you don't want to... having made the mistake last year of waiting too long, you don't necessarily fix that by doing too much now.
Nick Timiraos: Because of how the inflation measures are calculated, it'll take a lot of time for some of that to show up in the reported inflation data, but that would be another argument for taking more of a cautious let's wait and see approach.Nick Timiraos: Yes. There are other Fed presidents, in fact, the day that Lael Brainard gave her speech, the Chicago Fed President, Charlie Evans. Made a very similar argument for not overdoing things here.
Nick Timiraos: The report was alarming. The September consumer price index was high and it was high in the wrong places. Nick Timiraos: It sounds great, right? Everybody should be getting raises. The concern here is that this sort of inflation, the Fed calls it stickier because it's harder to get out of the economy. It doesn't just go right up and then come back, it tends to persist. If you change your job right now, you can get bigger pay.
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