Journal Article

The Unequal Effect of Interest Rates by Race, Gender

Abstract: Household spending typically falls as interest rates rise, but the responses vary by race and gender. Data show that households with mortgages headed by white women cut their spending on durable goods about a quarter percentage point in the three years following a 1 percentage point increase in interest rates. This is a much larger reduction than for households with mortgages headed by white men or Black men or women. The differences highlight the challenge of understanding how policy interest rate changes affect a diverse population.

Keywords: interest rates; race; gender; household spending; durable goods; diversity; white men; white women; black men; black women;

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Description: Essay Contest: Unlocking Our Potential


Bibliographic Information

Provider: Federal Reserve Bank of San Francisco

Part of Series: FRBSF Economic Letter

Publication Date: 2022-08-01

Volume: 2022

Issue: 19

Pages: 5

Note: This Economic Letter was developed through the San Francisco Fed’s Unlocking Our Potential essay contest for graduate students.

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