Former Philadelphia Fed President on Fed Outlook

The transcript discusses the Federal Reserve's approach to inflation and interest rate hikes. It highlights the shift in consensus towards multiple rate hikes starting in 2022, with concerns about the Fed's delayed response to inflation. Chair Powell's acknowledgment of inflation's link to aggressive monetary policy is noted as a significant step. The discussion also covers the potential risks of delayed action, including economic disruption, and the challenges of achieving maximum employment amid inflation concerns.

What was Chair Powell's significant acknowledgment regarding inflation?

• Inflation is a temporary phenomenon.

• Inflation is unrelated to monetary policy.

• Inflation is linked to aggressive monetary and fiscal policy.

• Inflation is solely due to supply chain issues.

How many rate hikes are some FOMC members predicting for next year?

• One or two

• Three or four

• None

• Five or six

What is the Fed's stance on raising rates before achieving maximum employment?

• They are not concerned with employment levels.

• They have already achieved full employment.

• They may raise rates before achieving full employment due to high inflation.

• They will not raise rates until full employment is achieved.

What is a potential risk of the Fed's delayed response to inflation?

• An increase in employment rates

• A need for aggressive rate hikes causing economic disruption

• A risk of economic expansion

• A decrease in inflation rates