Watch the Federal Reserve's interest rate decisions explained through a Rube Goldberg machine


The U.S. Federal Reserve's decision to raise its benchmark rate on Dec. 16, for the first time in a decade, was unanimous, but how quickly it will raise rates again is an open question — and one that will be vigorously debated as new, more hawkish voting members of the Fed's rate-setting Federal Open Market Committee take their seats in 2016, The Wall Street Journal predicts. Disagreement makes sense, because trying to steer a massive market economy like America's through interest-rate adjustments and monetary supply is an arduous balancing act.
If the Federal Reserve's rate deliberations seem sort of abstruse, or make your eyes glaze over, The New York Times created a Rube Goldberg machine to explain how the Fed uses a rate hike to try to tame inflation. A complicated chain of events is actually a pretty good way to explain the intended consequences of a Federal Reserve action — you can see why stock markets fall, for example — and if nothing else, it's always fun to watch a Rube Goldberg machine in motion. Hopefully, the inventive team at The Upshot will modify the machine to show how the Fed tries to affect the other part of its mandate: Boosting employment. Watch below. Peter Weber
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Peter has worked as a news and culture writer and editor at The Week since the site's launch in 2008. He covers politics, world affairs, religion and cultural currents. His journalism career began as a copy editor at a financial newswire and has included editorial positions at The New York Times Magazine, Facts on File, and Oregon State University.
-
The rise of 'vibe coding'
In The Spotlight Silicon Valley rush to embrace AI tools that allow anyone to code and create software
-
The jalapeño wine trend taking TikTok by storm
The Week Recommends Scatter a few chilli slices into your sauvignon blanc for a subtle and refreshing kick
-
Bitcoin braces itself for a quantum computing onslaught
IN THE SPOTLIGHT The cryptocurrency community is starting to worry over a new generation of super-powered computers that could turn the digital monetary world on its head.
-
Economists fear US inflation data less reliable
speed read The Labor Department is collecting less data for its consumer price index due to staffing shortages
-
Crypto firm Coinbase hacked, faces SEC scrutiny
Speed Read The Securities and Exchange Commission has also been investigating whether Coinbase misstated its user numbers in past disclosures
-
Starbucks baristas strike over dress code
speed read The new uniform 'puts the burden on baristas' to buy new clothes, said a Starbucks Workers United union delegate
-
Warren Buffet announces surprise retirement
speed read At the annual meeting of Berkshire Hathaway, the billionaire investor named Vice Chairman Greg Abel his replacement
-
Trump calls Amazon's Bezos over tariff display
Speed Read The president was not happy with reports that Amazon would list the added cost from tariffs alongside product prices
-
Markets notch worst quarter in years as new tariffs loom
Speed Read The S&P 500 is on track for its worst month since 2022 as investors brace for Trump's tariffs
-
Tesla Cybertrucks recalled over dislodging panels
Speed Read Almost every Cybertruck in the US has been recalled over a stainless steel panel that could fall off
-
Crafting emporium Joann is going out of business
Speed Read The 82-year-old fabric and crafts store will be closing all 800 of its stores