What will happen to the job market if the Fed raises interest rates? - www.marketplace.org

Higher rates can tamp down inflation, but they can also change the dynamics of the labor market. The Federal Reserve has two objectives: minimize inflation and maximize employment. It pursues these goals at Federal Open Market Committee meetings — one of which will happen in a little over a week — where it can tinker with the interest rate. While the Fed might not raise interest rates at this meeting, it will certainly have to do so eventually to combat inflation. September’s inflation data showed that over the last year, the consumer price index rose 3.7% , the producer price index rose 6.3% , and the importer price index rose 8.1% . But while higher interest rates can help fight inflation, they also impact the labor market.