
With inflation continuing to run hot across many sectors of the economy, the Federal Reserve has begun to raise interest rates, and seems set to raise them another 50-75 basis points in the coming days.
The purpose of these rate hikes is to kickstart the cooling process within the economy by constricting capital expenditure, which slows associated business and consumer spending, which then (hopefully) begins to restore price stability - all without (the Fed hopes) impacting the labor market too much. It’s a super delicate needle to thread, and it will be fascinating to see whether or not this approach ends up being an effective one, or if it becomes increasingly clear that the Fed’s response to inflation has been too little, too late.










