Why the last mile in the Fed's inflation fight has been uphill?

From Marketplace, I'm Nancy Marshall Genser in for David Brancaccio.

Let's start with a quick roundup of interest rate decisions from around the world this morning.

Switzerland's Central Bank cut its key interest rate

by a quarter of a percentage point

after signs of moderating inflation there.

Meanwhile, Norway Central Bank held rates steady, so did the Bank of England.

Here in the US, the Federal Reserve has also decided to keep rates elevated for a year now. The Fed has done this of course to fight

inflation and inflation has cooled a bit but it's still not all the way down to

the Fed's 2% target. That last mile has been difficult. For more on this, let's turn to

Julia Coronado, founder of macro policy perspectives. She spoke with my

marketplace colleague Sabrie Benashore.

I wanted to run an argument with my marketplace colleague Sabrie Benashore.

I wanted to run an argument by you that I've heard from some quarters that go something like this.

Here in the US, we can lock in our debt for a long time.

Mortgages are 30 years, you can lock in a low

when rates are low. Companies can do the same thing for their debt. So if so much of our

debt is locked in, does that make our economy less sensitive to the interest rates that the Fed sets?

Is the Fed not as powerful as we think it is?

Well what that does is mean that it takes longer for higher interest rates to bite the economy and it's

spread out over a longer horizon.

So as people move because after all people will have higher debt.

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