The Federal Reserve is thinking real hard about where to steer this economy.

From Marketplace, I'm Subrey Beneshore in New York.

The Federal Reserve is going to meet at the end of this month to figure out what to do with interest rates in the economy, what with everything.

The war, the job market, inflation, the list goes on.

This week, Fed officials have been giving speeches left and right and center sharing their

thoughts. Diane Swank has been watching. She's chief economist at the audit tax and advisory

from KPMG. Good morning, Diane. Good morning. So we've got all these fed officials talking about what they're thinking,

and they are the ones who are going to determine what happens to interest rates in this country.

What are they thinking?

They may have to make the next move in interest rates be up instead of down due to the war in Iran.

And it's not just the energy price impact. It is more than an

oil shock. It is rolling supply chains in ways that are similar, not the same, but similar to what

we saw emerging from the pandemic. And interest rate cuts can't cure what ails the labor market,

but they could make inflation worse.

And in fact, we cannot get full employment or sustainable employment until we get rid of

the tax that inflation is on all consumers.

The Fed's worried about inflation, worried about supply chains.

Why are markets so relentlessly positive right now?

It's a bit of a puzzle.

It seems a bit like listening by the graveyard, not quite a graveyard, perhaps just something less.

But it is a bit surprising, but it also exacerbates inequalities.

Diane Swunk, chief economist at KPMG. Thank you so much.

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