Facebook Pixel
The Daily

How Expecting Inflation Can Actually Create More Inflation


To fight historic levels of inflation, the Federal Reserve this week, once again, raised interest rates, its most powerful weapon against rising prices.

The move was intended to slow demand, but there was also a psychological factor: If consumers become convinced that inflation is a permanent feature of the economy, that might become a self-fulfilling prophecy.

Guest: Jeanna Smialek, a correspondent covering the Federal Reserve and the economy for The New York Times.

Want more from The Daily? For one big idea on the news each week from our team, subscribe to our newsletter.

Background reading:

For more information on today’s episode, visit nytimes.com/thedaily. Transcripts of each episode will be made available by the next workday.