Fed’s Kaplan on Business Imbalances, Tapering, Fed Funds Rate

The transcript discusses the ongoing inflationary pressures and supply chain disruptions, particularly in semiconductors, due to COVID-19. It highlights labor market imbalances with increased retirements and caregiving responsibilities. The Dallas Fed's inflation forecast is discussed, predicting persistent price pressures. The Federal Reserve's approach to asset purchases and interest rates is debated, with a focus on housing market impacts on rent inflation. The role of the Fed chair in fostering debate and consensus is also examined.

What is one reason for the prolonged imbalance in semiconductor supply?

• Government regulations

• Decrease in semiconductor production

• Lack of raw materials

• Increased demand due to electrification

What is a significant challenge businesses face in attracting labor?

• Fear of infection among workers

• Lack of technological advancement

• High competition from overseas

• Excessive government intervention

What is the Dallas Fed's year-end inflation forecast?

• 4.5% to 5%

• 3.8% to 3.9%

• 2.5%

• 1.5% to 2%

How does the Federal Reserve plan to handle inflation in low and moderate-income communities?

• By anchoring average inflation at 2%

• By providing direct subsidies

• By increasing taxes

• By reducing interest rates

What is the Federal Reserve's approach to asset purchases?

• To stop them immediately

• To adjust them gradually over 8 months

• To increase them significantly

• To maintain the current level indefinitely

What role does the Federal Reserve Chair play in policy-making?

• To make unilateral decisions

• To encourage debate and forge consensus

• To focus solely on interest rates

• To follow government directives

What is a potential impact of rising home prices according to the Dallas Fed?

• Stabilization of the housing market

• Increase in rent inflation

• Decrease in consumer spending

• Reduction in interest rates