POTENTIALLY AT ANY MOMENT.
THE CHAIRMAN OF THE FEDERAL
RESERVE WILL SPEAK ABOUT THAT
LATER THIS HOUR.
JOINING ME NOW IS MSNBC TECH
CORRESPONDENT, JOLENE KENT, AND
ALSO THE HOST OF PUBLIC RADIO'S
FULL DISCLOSURE PODCAST.
HAS IT COME THROUGH YET? >> THE FEDERAL RESERVE EXPECT TO
>> THE FEDERAL RESERVE EXPECT TO
RAISE RATES BETWEEN 2.5 AND --
THAT'S WITHIN THE LINES OF WHAT
WAS EXPECTED.
TAKING A LOOK AT WHAT THIS
MEANS, FEBRUARY INFLATION WAS AT
7.9%.
40-YEAR HIGH.
AND RETAIL SALES COMING IN LOWER
THAN EXPECTED SHOWING THAT
PEOPLE ARE UNABLE TO AFFORD
THEIR USUAL SPENDING WITH THE
GAS PRICES GOING UP, AND WE ARE
WAITING TO SEE HOW THE MARKETS
ARE REACTING RIGHT NOW AND
OVERALL MARKETS ARE REACTING
OKAY TO THE NEWS.
WHEN YOU LOOK AT THE RATE HIKE,
WHAT IT MEAN FOR YOU?
IF YOU HAVE A CREDIT CARD, IT
MEANS YOUR RATES ARE LIKELY TO
GO UP.
AND PRIVATE STUDENT LOANS, YOU
WANT TO GET INTO A LOCK
SITUATION SO YOU DON'T END UP
PAYING MORE.
THE GOOD NEWS IS FOR PEOPLE
KEEPING MONEY IN A SAVINGS
ACCOUNT, YOU MAY FOR THE
HIGH-YIELD SAVINGS ACCOUNT SEE
THAT INTEREST RATE GO UP.
WE ARE SEEING QUARTER OF A POINT
INTEREST RATE HIKE BY THE
FEDERAL RESERVE.
TO PUT THIS IN BROADER CONTRAST
WE ARE EXPECTING FIVE TO SIX
RATE HIKES COMING LATER THIS
YEAR BY THE FED.
THE NEXT FED MEETING IS IN MAY,
BUT OVERALL THE FED IS SAYING
THAT JOB GAINS HAVE BEEN STRONG
AND PART OF THEIR JUSTIFICATION
FOR RAISING RATES HERE, AND THE
IDEA IS THEY WANT TO TAME
INFLATION.
THE TRICKY PART FOR THE FED IS
WALKING THIS DELICATE LINE.
YOU WANT TO CURVE THE INFLATION
BUT DON'T WANT TO BE TRIGGERING
A RECESSION, AND WE DO HAVE A
VERY TIGHT LABOR MARKET SO YOU
DON'T WANT TO RISK COMPANIES
HAVING TO LAY OFF BECAUSE OF THE
DEVELOPMENTS, BUT RIGHT NOW THE
FED ALSO SAYING THEY ANTICIPATE
ONGOING INCREASES TO THE RATE SO
YOU CAN CONTINUE TO SEE MORE
RATE HIKES, BUT I AM GOING TO
TRY AND GET A QUESTION TO THE
FED CHAIR, JEROME POWELL HERE,
AT THAT PRESS CONFERENCE.
THEY ARE SAYING THEY ARE
PREPARED TO ADJUST RATES AS
NEEDED AND THAT'S A NOD TO THE
DELICATE SITUATION WE ARE
FACING, WHEN IT COMES TO THE
GEOPOLITICAL SITUATION, THE
SOARING INFLATION AND THE HIGH
GAS PROBLEMS AND THE PANDEMIC
SUPPLY CHAIN PROBLEM, KATY.
>> I UNDERSTAND A LOT OF THINGS,
THE ECONOMY AND THE FED NOT ONE
OF THE THINGS THAT IS MY STRONG
SUIT.
I AM CURIOUS.
IT FEELS COUNTERINTUITIVE TO ME
THAT RAISING A RATE AND HELPING
MAKE THINGS MORE EXPENSIVE WILL
SLOW DOWN INFLATION.
CAN YOU EXPLAIN HOW THAT IS
SUPPOSED TO WORK?
>> IT'S A LITTLE TRAVERSE.
YOU HAVE TO KILL THE ECONOMY A
LITTLE BIT, KILL IT SOFTLY TO
RESCUE IT.
WE DON'T WANT RUNAWAY INFLATION
THAT WE HAD IN THE EARLY '70s
AND '80s, AND THE RATES WENT TO
THE TEENS AND NOBODY COULD
AFFORD A MORTGAGE.
GAS PRICES ARE ALREADY HIGH.
WE HAVE BEEN NEEDING A RATE HIKE
OF SORTS SINCE VALENTINE'S DAY.
GAS PRICES, EVERY TIME YOU PASS A GAS STATION, EVERY TIME YOU
A GAS STATION, EVERY TIME YOU
ARE FILLING OUT YOU SEE THAT.
IN THE WAY OF REFERENCE, WE TALK
ABOUT THE INFLATION AT A 40-YEAR
HIGH, AND IN 1982, THE FED TOOK
THE RATES TO THE MID TEENS.
WE ARE TALKING ABOUT RATES
COMING UP FROM NOTHING BY A
QUARTER POINT, AND THE FED IS