Inflation Is Way Down. Is It by Design or Just Luck?

The Daily

The New York Times

Daily News, News

4.4 • 102.8K Ratings

🗓️ 20 June 2023

⏱️ 24 minutes

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Summary

Rapid inflation has been a problem in the United States for more than two years, but the tide appears to be turning. Monthly inflation is now less than half of what it was last summer. Jeanna Smialek, who covers the Federal Reserve and the U.S. economy for The Times, discusses whether the decline is a result of careful policymaking, or more of a lucky accident. Guest: Jeanna Smialek, a Federal Reserve correspondent for The New York Times.

Transcript

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0:00.0	From New York Times, I'm Michael Barrow. This is the Daily.
0:11.0	Today, after two years of record high consumer prices, inflation is falling in a big way.
0:19.0	The question now being asked by economists according to my colleague, Gina Smiley,
0:24.0	is whether that's by design or by accident?
0:34.0	It's Tuesday, June 20th.
0:43.0	Good morning everyone. This is a big day. New inflation numbers and, yeah, your money's at stake.
0:50.0	New economic numbers showing inflation is easing up.
0:54.0	Full percent inflation at the consumer level, much slower than the 9% that we had seen in the summer of last year was.
1:00.0	You know, the goal is down. How down is this?
1:03.0	Yes. This is down. This is the slowest pace in two years.
1:06.0	We're getting there just very slowly. Fed meets tomorrow. Big decision coming.
1:13.0	In light of how far we've come in tightening policy, today we decided to leave our policy interest rate unchanged.
1:19.0	The Federal Reserve hit the pause button today on hiking interest rates as it tries to tame inflation.
1:25.0	That is a significant shift after 10 straight meetings where they raised interest rates.
1:30.0	This is a really important moment for the economy and for the Federal Reserve. It has been on this mission.
1:43.0	Gina, good morning. Good morning.
1:46.0	We wanted to talk to you as our resident inflation expert because it now feels that the US government's long-term plan to try to lower inflation by raising the interest rate month after month after month is working.
2:00.0	And it feels that way for two reasons. The first is that a few days ago we got data showing that monthly inflation is now less than half of what it was last summer.
2:09.0	It's a really big decline. And right on cue, a day later, the Federal Reserve decided to pause its program of raising interest rates, which seemed to confirm the idea that inflation is in retreat.
2:21.0	And so we come to you, Gina, to ask, are we correct to understand that the government's policies are slaying the inflationary beast?
2:32.0	So I can totally see why you would think that because inflation has fallen quite a bit and that is obviously really good news.
2:41.0	Right.
	...

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