A reality check on inflation and the economy

1 big thing

Axios

News

4 • 2K Ratings

🗓️ 28 August 2023

⏱️ 10 minutes

🔗️ Recording | iTunes | RSS

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Summary

Federal Reserve Chair Jerome Powell said at the Jackson Hole Economic Symposium in Wyoming on Friday that inflation remains too high. He added that the central bank is prepared to raise interest rates further in the coming months. The big picture: Mortgage rates are already at a two-decade high and so far this year has had a record number of media layoffs. Why does this strong economy feel so weak in some areas? Plus, a racially motivated shooting in Jacksonville leaves three dead. Tropical Storm Idalia eyes Florida. Guests: Axios' Neil Irwin and Ina Fried. Credits: Axios Today was produced by Niala Boodhoo, Alexandra Botti, Fonda Mwangi, Robin Linn and Alex Sugiura. Music is composed by Evan Viola. You can reach us at [email protected]. You can send questions, comments and story ideas to Niala as a text or voice memo to 202-918-4893. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Good morning. Welcome, Naxios today. It's Monday, August 28th. I'm Nila Boudou. Here's
0:09.2	what you need to know today. Three killed in a racially motivated shooting in Jacksonville.
0:14.3	Plus, AI's web takeover. But first, a reality check on inflation and the economy. That's
0:20.9	today's one big thing. Although inflation has moved down from its peak,
0:27.3	a welcome development, it remains too high. That's Fed Chair Jerome Powell on Friday
0:32.5	at the Jackson Hole Economic Symposium in Wyoming. He added the central banks prepared to raise
0:37.5	rates further if appropriate. But with mortgage rates already at a two-decade high, so far this year,
0:43.8	we've also seen a record number of media layoffs. What actually is going on with inflation in the
0:49.6	economy? Axios' Neil Irwin is here with the reality check, Haniel. Hi, Nila. So you just got back
0:55.5	from Jackson Hole, where Fed Chair Powell warned that inflation is still far too high.
1:01.2	What about all the data in all the conversations we've had showing that inflation is
1:05.6	receding? So they're both true. Inflation peaked at 9% in the year and at last June,
1:11.0	it's now down to 3.2%. That said, a lot of that decline has come about because of energy prices
1:16.2	receding, and that's usually not something that gives you good indicators of what's going to happen
1:20.2	in the future. And so what the Fed's worried about is that, yes, we've gotten through that
1:24.0	surge inflation from 2021-22, but it's settling in at still a too high rate. It's something like four
1:29.5	or five percent, not the two percent that they aim for. And that's not good enough for them. So if
1:34.0	we keep seeing evidence that that's the case, they're going to keep raising interest rates.
1:37.6	Let's talk about labor. We've seen layoffs across especially tech and news, T-Mobile recently
1:43.5	announced 5,000 job cuts. The Texas Tribune laid off 11% of their staff. Where are we still seeing
1:50.8	a tight labor market? Almost everything else is the real answer. There is some real weakness in
1:55.5	some pockets of the economy, and our own industry, Naila, is one of them. There's some weakness in
	...

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