Why Fed rate hikes take so long to affect the economy, and why that effect may last a decade or more

From cnbc.com Watch this video at https://www.forexfactory.com/news/1257025-why-fed-rate-hikes-take-so-long-to.

The U.S. economy continues to grow despite the 5.5% benchmark federal funds interest rate set by the Federal Reserve in 2023. The Fed’s leaders expect their interest rate decisions to eventually slow that growth. The increase in borrowing costs that stems from Fed decisions does not affect all consumers immediately. It typically affects people who need to take new loans — first-time homebuyers, for example. Other dynamics, such as the use of contracts in business, can slow the ripple of Fed decisions through an economy. “It might not all hit at once, but the longer rates stay elevated, the more you’re going to feel those effects,” said Sarah House, managing director and senior economist at Wells Fargo. “Consumers did have additional savings