The Federal Reserve may have to raise its benchmark interest rate much higher than it has previously projected to get inflation under control, according to James Bullard, president of the Federal Reserve Bank of St. Louis. Bullard suggested that the Fed’s rate hikes will make borrowing by consumers and businesses even costlier and further heighten the risk of recession.

In today's episode of The Higher Standard, Chris and Saied take a deep dive into these comments and where they come from, as well as what they mean for the economy and the continuing fight against inflation.

Thanks to a submitted listener question, they discuss the true impact of rising interest rate on the current housing market.

Chris and Saied discuss a report stating that the number of available short-term rental listings in the U.S. skyrocketed to 1.38 million in September - a 23.2% year-over-year increase, according to rental analytics firm AirDNA.

They also discuss comments from KPMG's chief economist Diane Swonk who predicts that a 15% drop in home prices for next year is “very conservative,” as the housing bubble begins to pop.

Join Chris and Saied for this fascinating conversation.

Enjoy!

What You’ll Learn in this Show:

• Why Chris believes that an interest rate increase to the 5%-7% range in order to fight inflation seems to be a stretch.
• A report from the Federal Reserve Bank of Dallas predicting a home price correction could remove five to point seven percentage points from consumer spending.
• The real world impact of rental analytics on the future of AirBnB.
• How interest rates impact the monthly payments on a house.
• And so much more...

Resources:

"Fed’s Daly sees rates rising at least another percentage point as ‘pausing is off the table’" (article from CNBC)

"Sharp drop in mortgage rates does little to boost demand" (article from CNBC)

"Rising mortgage rates could take 20% bite out of home prices" (Article from The Real Deal)

"Too Many Rich People Invested In Airbnbs, More Than A Million Remain Unoccupied" (article from Travel Noire)

"Fed's Bullard says benchmark interest rate in 5%-7% range may be needed to bring inflation down" (article from MarketWatch)