Federal Reserve Interest Rates, Reports Reveal Iran War Costs, Kennedy Center Closure
Up First from NPR
This episode of Up First covers three major news stories: the Federal Reserve's anticipated interest rate hike amid rising inflation from th
Key takeaways
- The Iran war has driven up inflation, with oil and gasoline prices reaching record highs, prompting the Fed to consider rate hikes.
Main topics
- Federal Reserve interest rate policy
Notable quotes
"The Congressional Budget Office says if the war continues at roughly the same pace... this is going to add an additional $2 to $3 billion in monthly costs."
Conclusion
As inflation pressures mount due to ongoing conflict, the Federal Reserve prepares
Transcript preview
Speaker 5 (0:02) The Federal Reserve is expected to raise interest rates today for the first time in three years. Speaker 1 (0:07) The Iran war pushed inflation higher. How much more expensive could borrowing get? Speaker 5 (0:11) I'm Leila Fadil, that's A. Martinez, and this is Up First from NPR News. Speaker 5 (0:18) Two new reports put the cost of the Iran war above $30 billion. They also detailed the damage to U.S. bases from Iranian attacks and shortages of key weapons. What do the reports reveal that the Pentagon has not? And Speaker 1 (0:31) the Kennedy Center Board says the historic arts complex is in dire condition and voted to shut it down. The decision came just after a judge said President Trump's name cannot go on the building. And Trump says he won't make renovations unless that changes. Stay with us. We've got the news. you need to start your day. Speaker 8 (0:53) On NPR's Wildcard podcast, actress Gillian Anderson says she's looking forward to getting old. There is part of me that has always slightly fantasized about being in a home. Watch or listen to that Wildcard conversation on the NPR app, YouTube, or wherever you get your podcasts. Speaker 6 (1:17) On the next through line from NPR. Let's Speaker 1 (1:19) listen to Josh Reddick's new walk-up song. Speaker 6 (1:22) Whether you love it or you hate it, walk-up music has become a huge part of Major League Baseball. The need to secure the attention of the fans is relentless. I thought, am I hearing things? I mean, I realize everybody's singing along. Listen to NPR's through line in the NPR app or wherever you get your podcasts. Speaker 1 (1:41) The Federal Reserve is expected to raise interest rates today. Speaker 5 (1:45) Prices have been climbing faster than wages in recent months, so the typical worker has been losing ground. Inflation has been higher than the central bank wants it to be for a long time. Speaker 1 (1:55) NPR's Scott Horsley joins us now. Scott, it's been, what, more than three years since the Fed has raised interest rates. Why do it now? Speaker 4 (2:03) A, the U.S. war with Iran has rekindled inflation, pushing oil and gasoline prices higher. The Congressional Budget Office warns the war is likely to keep putting upward pressure on prices into next year. Just today, AAA said the price of diesel had jumped to another record high, $6.31 a gallon. And Fed Chairman Kevin Warsh renewed his promise to get inflation under control when he spoke last month in Jackson Hole, Wyoming. Now, while higher interest rates won't automatically bring lower prices at the gas pump, raising rates is the Fed's primary tool for fighting inflation. Forecaster Omer Sharif says if the Fed doesn't use that tool after Warsh's hawkish speech last month, the Fed risks losing credibility. Speaker 1 (2:44) I just think it's time to either raise rates or just sell the market. We don't play on raising rates. It doesn't really matter what happens with inflation. We're just going to sit tight. Speaker 4 (2:52) Investors are definitely anticipating that the Fed will deliver on Warsh's hawkish comments this afternoon. Market odds of a rate hiker north of 90 percent. Speaker 1 (3:01) Okay, so that's the answer to why on raising interest rates. Next question, Scott, how high? Speaker 4 (3:07) The Fed is expected to raise its benchmark interest rate by a quarter percentage point today. And then beyond today's meeting, we'll see what happens. The central bank has two more meetings on the calendar this year. It's possible the Fed could push rates higher, especially if inflation remains elevated. But Sharif suspects Warsh will temper any rate hike today with a cautious news conference so investors don't walk away thinking that additional rate hikes are necessarily baked in. In addition to the chairman's news conference, we're going to get a series of