With inflation at multidecade highs, the Federal Reserve appears prepared to raise its key interest rate target, perhaps as early as March. In this Q&A, Vanguard economists Josh Hirt, Asawari Sathe, and Adam Schickling discuss inflation, labor, and the risks of the Fed’s hiking rates either too aggressively or not aggressively enough.
In a related commentary, Vanguard global chief economist Joe Davis discusses why central banks need to use their powerful tools to rein in inflation and why, long-term, that can be good for investors.