How fast would the economy feel an interest rate cut?

Marketplace

News, Business

4.6 • 8.5K Ratings

🗓️ 10 July 2024

⏱️ 28 minutes

🔗️ Recording | iTunes | RSS

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Summary

Inquiring minds want to know: When will the Federal Reserve cut interest rates? Fed Chair Jay Powell isn’t ready to answer that question. But when rates are cut, there’s gonna be a lag before the Americans feels it. Also in this episode: Egg-freezing rates skyrocket as more employer benefits cover the procedure, the U.S. is less trade-oriented than other countries, and nearly half of Gen Xers aren’t financially on track to retire, a new study says.

Transcript

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0:19.8	Marketplace. What goes up must eventually come down. How long that journey takes? TVD. From American
0:29.8	Public Media, this is Marketplace. In New York, I'm Kristen Schwab in for Kyrisdahl.
0:34.0	It's Wednesday, July 10th. Good to have you with us.
0:47.0	Today was day two of Federal Reserve Chair Jerome Powell's testimony on Capitol Hill. Here's the low down. It sounded a lot like
0:55.0	yesterday. Basically we're making progress on inflation, but the mission has not
0:59.5	yet been accomplished. Now the Fed's been on this mission for more than two years. It first raised interest rates in March of
1:07.1	2022 and has yet to set a date for cuts, though Wall Street expects it to happen sooner than later.
1:14.0	Whenever the cuts do come, well, then what?
1:18.0	As in, will the pace at which Powell cuts rates match the pace at which he pushed and propped them up.
1:24.0	Marketplace's Matt Levin has more on how fast or slow rates might fall.
1:29.0	Part of the Fed's job is to take away that proverbial punch bowl before the economy gets too crazy and starts
1:36.2	doing keg stands on the front lawn.
1:39.0	Fed-Hare J. Powell took away the punch bowl a while back with those raid hikes and now that the party
1:44.4	finally seems to be dying down. He's got his hands on the punch bowl. He's walking
1:50.0	around the room with it and he's not sure whether to put it down on the table yet.
1:54.0	Anne Owen is an economist at Hamilton College.
1:57.0	She says even when the Fed does decide to cut rates,
2:00.0	the economy doesn't immediately roar back to life.
	...

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