Reporters Face Challenge With Interest Rate Story

The Federal Reserve hiked short-term interest rates last week to 3.25 percent from 3 percent — the ninth increase in a year. With these announcements from the Fed becoming routine, reporters face the challenge of making the news different and interesting.

"It's not hard to sell a story about the direction of interest rates because it's enormously important to average people," says Marilyn Geewax, a business reporter for Cox News Service. Since many readers are affected by rate changes, a reporter can show the impact.

Reporter Mark Davis of The Kansas City Star did just that. Davis received an e-mail from reader John D. Woods in response to an earlier Fed story and decided that he would fit nicely into his interest rate story. Davis' article began by telling how the increase affected the local retiree's income.

"I wanted to get a person in there whose life was directly impacted by what was happening," Davis says. "It would give readers a starting point of interest."

It also tied in the issue of when we would see an end to climbing rates. Davis talked to people who follow the Fed, such as money and mutual fund managers and economists. Such sources help to provide analysis of what the Fed's move means and how many increases to expect.

By including the human impact along with expert opinions, Davis was able to provide varied commentary on the rate increase.

Most reporters pointed out that while short-term rates are increasing, long-term rates remain surprisingly low. Charles Stein, a business reporter for The Boston Globe, says that this anomaly makes the story more interesting than a garden variety rate hike.

To make a rate story different, he says that reporters can "spin it towards things that have a little bit more interest instead of focusing on the event, which is more routine."

The best business stories come from looking at the real world to find what is interesting, Geewax says. She found her rate story through her brother, who works in the mortgage business. Even though short-term rates are going up, his business is booming because of low long-term rates.

She talked to economists to determine why long-term rates are behaving so uncharacteristically and then explained it to readers. That explanation can be invaluable for everyday readers who are unfamiliar with interest rate jargon.

"I was covering Alan Greenspan's speech in June … and he said he didn't really know what was going on with interest rates, so readers probably don't either," Geewax says.

Just because something is common doesn't mean that people understand it. Geewax says she received a number of e-mails thanking her for explaining the difference between short- and long-term interest rates.

"Try to explain things that are everyday occurrences by making it simple enough that the average person can understand," Geewax recommends.

You can do this by breaking the issue into parts and using plain language.

"In some ways, I'm kind of an interpreter … taking economics (language) and turning it into English," Geewax says.

An advantage to Fed stories is that the decision is often expected and allows business journalists to start reporting before the announcement. Reporters can use this time to make their piece relevant to readers and find an interesting approach to a now routine story.

Copyright © 2008 Donald W. Reynolds National Center for Business Journalism