美国国家公共电台 NPR--World central bankers are set to take new steps in their battle with inflation（在线收听）

World central bankers are set to take new steps in their battle with inflation

Transcript

NPR's A Martinez talks to David Wessel of the Brookings Institution about the Federal Reserve's plans to approve another rate hike this week. The European Central Bank is preparing to do the same.

A MART?NEZ, HOST:

The Fed and the European Central Bank are considering raising interest rates again as soon as this week in their battle against inflation. Here to talk about what this means to American consumers, we turn to David Wessel. He's the director of the Hutchins Center at the Brookings Institution. David, so let's start off with inflation here. How likely is it that a slow-and-steady approach wins this race?

DAVID WESSEL: Well, look, progress against inflation is very slow. We get some more data tomorrow, the Consumer Price Index for November, and it'll probably show that some of the supply chain pressures that have been driving up prices are beginning to abate. I mean, like, prices of apparel and used cars have been coming down. Gasoline prices have fallen as well. Now, the CPI report for October was encouraging, but then last week, we got discouraging news on wholesale prices. Overall, the problem is that prices are still climbing much faster than the Fed's 2% goal. Even if you exclude volatile food and energy prices, which is a way to gauge the underlying base of inflation, consumer prices rose more than 6% over the past year. In short, inflation just isn't coming down fast enough to get the Fed to relax.

MART?NEZ: All right. So then what is the Fed going to try and do about this?

WESSEL: Well, it's going to keep raising interest rates. Interest rates started the year at zero, which is extraordinary. The Fed has raised them unusually fast by 3.75 percentage points so far. And it's signaled that it's going to raise them another half percentage point when their meeting concludes on Wednesday. From Jay Powell on down, Fed officials have said we're going to keep raising rates until we sure we've beaten inflation back into the ground. How much more are they going to go up? Well, that really depends on the economy. But there's now a good chance that the Fed will push short-term interest rates above 5% next year and hold them there for a while until it's convinced that inflation has gone.

MART?NEZ: All right, above 5%. So how are these interest rate hikes, then, affecting the U.S. economy?

WESSEL: Look, the Fed is trying to slow the increase in demand - the amount we buy and the amount businesses spend - so that they match the available supply in the economy and relieve the upward pressure on prices. That's the strategy. So far, the pace of economic growth is slowing. The most immediate impact has been on the housing market. Rates on 30-year mortgages have risen from 3% at the beginning of the year to well above 6%. But the job market has been surprisingly strong. Even though the number of vacant jobs has fallen, unemployment remains low. And Fed Chair Jay Powell keeps saying that wages are rising faster than consistent with his 2% inflation goal. So they're going to keep raising interest rates. And the more they raise rates, the greater the chances of a recession next year, which some but not all forecasters are now anticipating.

MART?NEZ: And rising inflation is not just a United States problem it's a global one, too. So how do things here in the U.S., David, compare to the rest of the world?

WESSEL: That's a good point. So inflation is rising everywhere around the world or it's above target. And that tells you that there's some common forces at work here - the disruption of supply chains due to COVID-19, which, among other things, keeps shutting Chinese factories, and, of course, the surge in food and energy prices that have been triggered by Russia's invasion of Ukraine. I mean, inflation is high everywhere, even in Japan, which has been wrestling with deflation for years. But in Europe, inflation is much worse than the United States. Prices there are up more than 10% in the past year alone. And that's largely driven by natural gas prices. And so while the Fed is raising rates to slow an economy that it thinks is growing too fast, the European Central Bank has a much harder job. It's dealing with above-target inflation, raising interest rates to fight inflation, an economy that is growing very slowly and where the unemployment rate is double the rate in the United States.

MART?NEZ: That's David Wessel of the Brookings Institution. David, thanks.

WESSEL: You're welcome.