Where Are Interest Rates Going?
In a recent episode of Planet Money, two leading macroeconomists, Larry Summers and Olivier Blanchard, debate the future of our economy. It matters a lot which one of them is right. The answer could have big implications for the cost of borrowing, your home value, your retirement fund, and the future of policymaking in America.
Olivier Blanchard is the former chief economist of the International Monetary Fund (IMF) and a professor emeritus at MIT. He is currently a senior fellow at the Peterson Institute for International Economics.
Larry Summers is the former U.S. Treasury Secretary, former head of the National Economic Council under President Obama, and the former president of Harvard University. He is still an economics professor there.
The debate between Blanchard and Summers can be boiled down to a disagreement about the future of interest rates. Are they going to go back down to the record-breaking low levels that we saw just a few years ago? Or should we be bracing for a new era of higher interest rates? An era, in other words, where it will be more expensive to borrow money, which could have huge consequences for the housing market, the stock market, and the capacity
