The Cheap Money Era Isn't Coming Back
Summary
Mary Harris discusses rising interest rates with economist Justin Wolfers, who explains that the Federal Reserve’s recent hike signals a shift away from the era of cheap money. Wolfers attributes the rate increases to a surge in loan demand driven by massive government deficits, AI infrastructure spending, and inflation from the Iran war and tariffs. He argues that while the Fed is making defensible choices to combat inflation, the primary economic threats stem from the Trump administration’s fiscal and trade policies. The episode also promotes a live show in Richmond, Virginia, where Harri…
Topics discussed
Announcement of live show in Richmond, Virginia
Trump's push for cheap money vs. Fed rate hike
Justin Wolfers joins to discuss interest rate signals
Economic readiness for rising interest rates
Historical context: From Ghostbusters era to 2008
Global factors: Bond markets, deficits, and Iran war
Explaining bond markets using the apple analogy
Three drivers of rising rates: Govt, future deficits, AI
Slate Plus pledge drive promotion
Is the economy too hot? Divergence in data and perception
How rate hikes cool inflation and impact jobs
Policy errors: Tariffs, war, and internal economic threats
Political timing of Fed decisions before midterms
Assessing Kevin Warsh and Fed independence
Significance of the unanimous Fed vote
Credits and sign-off
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