How to bring down inflation

The Indicator from Planet Money

NPR

Business

4.7 • 9.2K Ratings

🗓️ 10 February 2022

⏱️ 9 minutes

🔗️ Recording | iTunes | RSS

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Summary

Today, inflation hit a 40-year high of 7.5%. The Federal Reserve is expected to start raising interest rates next month, but how exactly does that affect inflation?

Transcript

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0:00.0	NPR.
0:11.9	The other day we hit the streets of Manhattan to ask about price inflation.
0:16.6	Say have you noticed prices rising?
0:18.6	Yes, absolutely.
0:20.0	Yes I have.
0:21.0	Definitely.
0:22.0	Yeah.
0:23.0	And yeah, look, life in New York has always been expensive.
0:27.3	But across the US, the price of airline tickets, gas, housing, food, these things are all
0:33.1	going up.
0:34.1	We can't go grocery shopping without having a list and we can't venture far from that
0:38.8	list.
0:39.8	Today's numbers on the cost of living show that the inflation rate shot up to 7.5%.
0:45.0	And that's the highest rate in 40 years, which has got people worried because in healthy
0:50.8	economic times, inflation is pretty low, like around 2%.
0:54.9	And you know the government agency charged with keeping prices stable is the central bank,
0:59.4	the federal reserve, and the Fed has one big tool for controlling inflation.
1:04.7	Interest rates.
1:05.7	Interest rates are likely to go up this year.
1:07.6	Say what do you think will happen to a price inflation overall when that happens?
1:11.8	Oh jeez.
1:12.8	I don't think I'll have that much of an effect.
	...

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