Informa's Cavenagh Says Market Will Challenge Fed Through 2021

The transcript discusses the Federal Reserve's economic outlook, highlighting the challenges of balancing inflation and rate hikes. It analyzes the dollar and Treasury market movements post-FOMC statement, noting potential unwinding of dollar weakness. The inflation narrative is explored, with emphasis on transitory pressures and break even rates. The Bank of Japan's potential yield target adjustment is examined, considering market volatility and implications for dollar-yen dynamics.

What is the main challenge the Federal Reserve faces according to the first section?

• Managing international trade

• Balancing economic momentum and inflation control

• Reducing unemployment

• Increasing interest rates

What was the market's general position on the dollar before the FOMC statement?

• Long on dollars

• Short on dollars

• Hedged on dollars

• Neutral on dollars

What is the expected impact on the euro-dollar exchange rate according to the second section?

• Euro will remain stable

• Euro will struggle to break above 120

• Euro will weaken significantly

• Euro will strengthen significantly

What is the nature of the inflation discussed by Powell in the third section?

• Hyperinflationary

• Deflationary

• Transitory

• Permanent

What is a key factor contributing to the uncertainty in future inflation rates?

• Stable commodity prices

• Wage growth

• Decreasing supply chain disruptions

• Stable fiscal policies

What is a potential risk if the Bank of Japan moves on its yield target?

• Increased market stability

• Decreased market volatility

• Increased market volatility

• Decreased currency value

What might the market test in response to the Bank of Japan's potential policy shift?

• US Treasury yields

• Federal Reserve's interest rates

• BOJ's resilience

• European Central Bank policies