Plosser Is Concerned Reforms May Make Fed More Political

The transcript discusses the Federal Reserve's considerations for raising interest rates, the market's reaction to these signals, and the potential impact of economic projections. It highlights the uncertainty surrounding the Trump administration's policies and their effect on the economy. The discussion also covers inflation, wage growth, and the importance of the Fed maintaining its independence amidst calls for reform.

What has been a major issue for the Federal Reserve in maintaining its credibility?

• Signaling rate hikes but not implementing them

• Failing to signal rate hikes

• Ignoring market trends

• Consistently raising interest rates

What was the narrow consensus in December regarding interest rate hikes for 2017?

• One rate hike

• Four rate hikes

• Two rate hikes

• Three rate hikes

What is the potential risk if the Fed waits too long to raise rates?

• Increasing inflation uncontrollably

• Causing a recession

• Missing economic growth opportunities

• Having to raise rates too quickly

What is considered a lagging indicator of inflation according to the transcript?

• Consumer Price Index

• Interest rates

• Wage growth

• Oil prices

How does the transcript describe the current state of inflation?

• Below target

• At target

• Above target

• Unpredictable

What is a primary concern regarding the reform of the Federal Reserve?

• Expanding its responsibilities

• Reducing its independence

• Decreasing its transparency

• Increasing its budget

What is the concern about the Fed's independence related to?

• Its ability to set interest rates

• Its relationship with Congress

• Its role in global markets

• Its internal governance