Get used to higher interest rates

Today, Explained

Vox

Politics, Daily News, News

4.3 • 10.3K Ratings

🗓️ 4 May 2023

⏱️ 24 minutes

🔗️ Recording | iTunes | RSS

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Summary

The Federal Reserve has once again raised interest rates, which means borrowing money for your mortgage or your business is once again more expensive. New York Times economics reporter Talmon Joseph Smith explains why this might keep happening. This episode was produced by Miles Bryan and Amanda Lewellyn, edited by Matt Collette, fact-checked by Serena Solin, engineered by Michael Raphael and Paul Robert Mounsey, and hosted by Noel King. Transcript at vox.com/todayexplained Support Today, Explained by making a financial contribution to Vox! bit.ly/givepodcasts Learn more about your ad choices. Visit podcastchoices.com/adchoices

Transcript

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0:00.0	Over the last 14 months on nine separate occasions, Jerome Powell's Federal Reserve has ticked
0:07.0	interest rates up up up.
0:09.0	And then yesterday, a typically subdued Powell did it again.
0:12.3	Today, the FOMC raised its policy interest rate by a quarter percentage point.
0:17.2	Since early last year, we've raised interest rates by a total of five percentage points.
0:21.3	Many words to say, the Fed is making money more expensive.
0:24.5	Your mortgage, your small business loan, it just costs more to borrow.
0:29.0	A point that he typically amped Senator Elizabeth Warren has made.
0:32.6	Chair Powell hasn't just raised interest rates.
0:35.6	He has raised them on a curve unlike anything which seems...
0:40.6	It's been in 40 years.
0:41.6	...deadest in 40 years.
0:42.9	In 14 months, he's gone up by points here.
0:46.9	And that's when things start to break.
0:51.0	Today, unexplained, our higher interest rates starting to break things.
1:00.0	Today, what does it mean?
1:04.0	This is Today Explained.
1:06.0	Today Explained.
1:12.0	Talmud Joseph Smith, economics reporter at The New York Times, and good friend of Today Explained,
1:18.0	start by telling me whether a 5.25 interest rate, which is where we're at today, is considered high.
1:24.0	Yes, and no.
1:26.0	So, to get to the yes first, it is absolutely a very high interest rate compared to say the 2010s,
	...

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