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Marketplace All-in-One

Sticky inflation means the cost of borrowing could stay higher

Marketplace All-in-One

Marketplace

News, Business

4.51.4K Ratings

🗓️ 19 December 2024

⏱️ 8 minutes

🧾️ Download transcript

Summary

Stock and bond markets took unnerving tumbles yesterday when the Federal Reserve Chair suggested there won’t be as many interest rate cuts next year. The S&P fell 3% and the Dow fell more than 1,100 points. We could also get a partial federal government shutdown by the end of the week. We’ll discuss the latest economic headlines. Plus, some Amazon workers go on strike today, and we’ll hear more about the merch economy.

Transcript

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Sticky inflation means the cost of borrowing could stay higher.

1:02.1

I'm David Brancaccio in New York.

1:05.9

The stock and bond markets took unnerving tumbles yesterday when the chair of the Federal Reserve suggested there won't be as many cuts in interest rates next year. The S&P fell

1:12.1

3% and the Dow fell more than 1100 points. And separately, we could get a partial federal

1:18.0

government shutdown by the end of this week. Let's consult Diane Swank, the chief economist at the

1:23.1

audit tax and advisory firm, KPMG. Hello. Good morning. Would you help me with something before we go any further?

1:29.3

Presidential advisor, Elon Musk, and president-elect Donald Trump don't like the bipartisan deal Congress put together to keep the federal government running more than two more days. The complaint is the bill's bloated, expensive, but help us with this. Trump surprised people with an additional demand. You heard he wants the debt ceiling raised now so the government can what, spend more when his team comes in?

1:51.7

This is an antiquated thing, but it has been used repeatedly by those very people in Congress who have argued that the government spending too much money, and they've used the

2:01.8

threat of not raising the debt ceiling to rein in government spending and negotiate. So it is a bit of

2:09.2

a puzzle of why it's being used the way it is today. All right, a puzzle. Now, another puzzle is

2:15.9

stock market investors seemed blindsided yesterday when the Fed suggested rates might stay higher for longer next year.

2:23.3

I think they missed the memo. They really thought that when the Fed was telegraphing, they were going to slow down the cadence of rate cuts. They thought, well, that's already in there. It's every other meeting in their

2:34.4

September forecast, but a lot has changed since September. The U.S. economy is much stronger,

...

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