Fed Needs to Address the Reality of the Near-Term: Julia Coronado

The transcript discusses the Federal Reserve's anticipated actions regarding treasury and asset purchases, emphasizing the need for economic support amid the pandemic. It highlights the uncertainty in economic forecasts despite vaccine developments and explores potential inflation as the economy reopens. The Fed's understanding of inflation dynamics and its focus on employment as a key metric for policy recalibration are also covered.

What is one of the Federal Reserve's expected actions to address the economic challenges posed by the pandemic?

• Cutting government spending

• Increasing taxes on corporations

• Extending the maturity of treasury purchases

• Reducing interest rates to zero

How do asset purchases help support the economy during uncertain times?

• By increasing inflation rates

• By providing insurance on market conditions

• By reducing unemployment benefits

• By decreasing consumer spending

Why might markets become less confident if the Federal Reserve appears hesitant?

• Because it suggests a strong economy

• Because it indicates a lack of support

• Because it results in lower interest rates

• Because it leads to higher taxes

What is a major factor contributing to the uncertainty in economic forecasts?

• The decrease in oil prices

• The rise in global trade

• The ongoing health crisis

• The introduction of new technology

What is the Federal Reserve's stance on potential inflation as the economy reopens?

• They plan to increase interest rates immediately

• They will stop all asset purchases

• They understand the difference between inflation and price level changes

• They are concerned about immediate inflation

What is the first metric the Federal Reserve will watch to adjust policy?

• Stock market performance

• Full employment

• Housing market trends

• International trade balance

What is a potential outcome as vaccines become more widely available?

• A bout of inflation due to increased demand

• A reduction in government debt

• A decrease in consumer spending

• A rise in unemployment rates