the unemployment rate falling to 3.9%. almost where it was before the pandemic started. here is the important part. average hourly wages increased by 4.7% last year. that s a healthy boost. it s contributing to inflation. however, inflation rose faster than wages. which is back to being a bad thing. the fed has signalled it s public enemy number one. historically, best way for central bank to fight inflation is increasing interest rates. which makes money itself more expensive to borrow. americans, both consumers and companies will think twice if the money they are spending is borrow and costs more. all of that reduces demand and that slows inflation. if the road to lower inflation includes a detour through higher interest rates, then your credit cards, student loans and mortgages will cost more. stocks will go down in value and your 401(k) will suffer. mortgage rates have started rising. which could put a damper on home
weaknesses to warranted. there are still some weaknesses to the warranted. there are still some weaknesses to the labour - warranted. there are still some i weaknesses to the labour market and these are a concern and a pandemic may not be god. if a new variant comes along that is a real problem. find new variant comes along that is a real problem. a real problem. and what does this mean a real problem. and what does this mean for a real problem. and what does this mean for main a real problem. and what does this mean for main street? - this mean for main street? higher borrowing cost will make loans more expensive and if that slows inflation, however, the thinking is that that will help everyone. still, the central bank s focus on inflation does seem to have unnerved wall street with the us market falling sharply. and thatis us market falling sharply. and that is michelle. scott anderson is chief economist at bank of the west in san francisco. welcome to the programme, scott
the fed will raise rates as much as the market expects. the way you can characterise first of all, i am not so sure that transporting everything to the us works on lowering inflation, it was a bit of misdirection. it is a little bit like with ukraine, the economy, he is projecting a long game solution when a short, immediate solution antidote is necessary. what he was really talking about was not for businesses to cut wages but for the fed to slow the economy because that always slows inflation. slows inflation. one of his flat-shi slows inflation. one of his flagship policy slows inflation. one of his flagship policy is - slows inflation. one of his flagship policy is also - slows inflation. one of his flagship policy is also the | flagship policy is also the
thank you very much. stay with us, still to come, we will look how to offer economic support to those fleeing ukraine. an mock reaction tojoe biden s first state of the union address. including how to get record level of inflation under control. first, the plates slid gently off the restaurant tables. then suddenly, the tables, the chairs and people crashed sideways and downwards. it was just a matter of seconds as the ferry lurched onto her side. the hydrogen bomb on a remote pacific atoll. the americans had successfully tested a weapon whose explosive force dwarfed that of the bomb dropped on hiroshima. i had heard the news earlier, and so, my heart went bang, bang, bang! -
department will set up a task force to pursue what it says is ill gotten gains and also said they are coming for them. that was a strong message for ukraine. you are right, when it came to the domestic agenda, thatis came to the domestic agenda, that is when he started to see some of the disagreements on inflation, that is one of the big issues. on the one hand you have the economy in america doing very well but on the other hand americans don t feel that way and in fact they fill the country is in recession. that was a delicate fine line that you saw that was a delicate fine line that you sanoe biden having to tread. when it comes to inflation, it is a rising problem around the world. he said that was a top priority but he warned businesses not to cut wages, but bringing supply chains and manufacturing back to the us?