Plosser: Was 'a Bit Disappointed' With Fed's Statement

The transcript discusses the Federal Reserve's current monetary policy, highlighting the lack of clear guidance and the challenges in achieving their inflation targets. It explores the Fed's communication issues, the expansion of employment mandates, and the potential impact of increased liquidity on inflation. The discussion also speculates on the Fed's future actions and the implications of their strategies on economic recovery.

What was the market's reaction to the Fed's recent guidance on inflation targeting?

• The market was confused by the guidance.

• The market was satisfied with the clear guidance.

• The market was disappointed due to lack of clear guidance.

• The market was indifferent to the guidance.

What is the main challenge the Fed faces with its inflation target?

• Maintaining inflation at exactly 2%.

• Eliminating inflation entirely.

• Reducing inflation to below 1%.

• Achieving a consistent inflation rate above 2%.

What does the term 'inclusive employment' refer to in the Fed's mandate?

• Employment that includes only high-income individuals.

• Employment that focuses on specific industries.

• Employment that considers gender and ethnic diversity.

• Employment that excludes part-time workers.

What is a potential consequence of the Fed's focus on inclusive employment?

• Reduced accountability for employment outcomes.

• Improved economic growth without challenges.

• Decreased political involvement in monetary policy.

• Increased political pressure on the Fed.

How does the recent liquidity infusion differ from the financial crisis?

• The money has remained within the banking system.

• The money has been distributed widely in the economy.

• The money has been used to pay off national debt.

• The money has been invested in foreign markets.

What is a potential risk of the recent liquidity infusion?

• A reduction in government spending.

• Deflationary pressures in the economy.

• A significant increase in inflation.

• A decrease in consumer savings rates.

What might the Fed need to do to offset past inflation shortfalls?

• Achieve 3% inflation for a few years.

• Maintain inflation at 1% for several years.

• Reduce inflation to 0% immediately.

• Ignore inflation targets altogether.