TD Securities' Misra: Markets Underestimating 2022 Fiscal Drag

The video discusses the Fed funds rate, market predictions, and the impact of COVID on inflation. It analyzes the Fed's response to inflation, the economic outlook, and labor market slack. The discussion includes the length of the economic cycle, Fed policy, and the divergence in global central banks' policies. Future interest rate predictions and their economic impact are also covered.

What is the market's current expectation regarding the timing of the first rate hike?

• In the middle of tapering

• Right after tapering ends

• Before tapering ends

• At the end of 2023

What is the main reason for the perceived slack in the labor market?

• Rapid economic growth

• Increased fiscal drag

• COVID-related factors

• High inflation

How does the current economic cycle compare to the post-financial crisis cycle?

• It is expected to be more intense

• It is expected to be longer

• It is expected to be shorter

• It is expected to be the same length

What is the expected outcome for the ECB and Fed in the year of divergence?

• They will both lower interest rates

• They will both maintain patience due to past inflation targets

• They will both face significant fiscal tightening

• They will both tighten policies aggressively

What is the potential endpoint of the Fed's hiking cycle according to the speaker?

• 4.5%

• 1.5%

• 2.5%

• 3.5%

What is the speaker's view on the Fed's ability to handle higher interest rates?

• Higher rates are unnecessary

• Higher rates will be challenging due to increased debt

• The economy can easily handle higher rates

• Higher rates will boost productivity

What is the main concern if the Fed raises rates to 3%?

• The economy will struggle

• The labor market will strengthen

• The economy will thrive

• Inflation will rise