America’s Monetary Landscape in Recent Decades: A Review of Interest Rate and Inflation Dynamics

Abstract

This article reviews US inflation and interest rate dynamics within the context of the post-2000 era, emphasizing the period from the 2008 financial crisis to the contemporary, post-COVID era marked by increased inflation, fiscal spending, and rising interest rates. The article uses various illustrations of macroeconomic factors to explain the multifaceted US inflation and interest rate dynamics such as real inflation (past and future), expected inflation, labour market characteristics, and Ben Bernanke's variation of the Taylor Rule.