How is Inflation Shaping the Post-Pandemic US Economy?

Abstract

     Today, the federal funds rate sits at 5.25%-5.50%, a record high since February 2001. The Federal Reserve Bank has been increasing interest rates largely because of stubborn inflation. Since 2021, America has seen high inflation, prompting the Fed to raise rates. This has had a ripple effect on the entire US economy, affecting both consumers and businesses. This literature review was written to understand the cause of the inflation and the effects that inflation has had on businesses, banks, consumers, workers, and families. In conclusion, it can be deduced that increased consumption as a result of the stimulus checks contributed to the high inflation, and when the Fed raised rates, that triggered a series of layoffs, bank failures, and change in consumer behavior.