Paying More for Money

Interest rates are hurting, but Volcker holds fast against inflation

Interest rates are normally an arcane subject, thought to be of passionate concern only to bankers and other financiers, and not fully understood even by them. Yet one way or another interest rates are paid by everyone who borrows money, which in the modern credit economy means just about everyone, period. Interest rates help to determine whether a business can hire workers, whether a consumer can afford his or her dream house, whether a farmer can plant seed. If they escaped the front-page headlines and the TV news in the past, that was because rates usually changed only slowly and...

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