The Doer vs. The Fed: Why Rate Hikes Make Us Think Inflation is Getting Worse

This episode explores the fascinating paradox where the public often interprets Federal Reserve interest rate hikes, intended to combat inflation, as a sign that inflation is actually getting worse. It delves into the behavioral mechanisms, such as salience, the availability heuristic, and confirmation bias, that contribute to this fundamental disconnect in how monetary policy is understood. Listeners will learn why individuals, or "Doers," focus on immediate, painful costs of rate hikes rather than their long-term anti-inflationary goals, and the profound implications this has for the effectiveness of central bank actions.