Janet Yellen's House Testimony in Two Minutes

The video discusses the Federal Reserve's focus on achieving a 2% inflation target and the risks of persistent undershooting. It outlines plans for normalizing the balance sheet gradually and predictably. The speaker opposes auditing the Federal Reserve, emphasizing that it is already audited in ways that meet public standards. The video also assesses the impact of asset price movements on financial stability, noting that the banking system remains strong and resilient.

What is the primary concern associated with consistently missing the inflation target?

• Increased unemployment

• Persistent undershoots of the inflation objective

• Higher interest rates

• Decreased consumer spending

What condition is necessary for the normalization of the balance sheet to begin?

• A rise in unemployment rates

• A significant drop in inflation

• Economic evolution in line with expectations

• A change in government policy

What is the speaker's stance on auditing the Federal Reserve?

• Neutral

• Strongly opposed

• Indifferent

• Strongly in favor

How does the speaker describe the current state of the financial system?

• In need of reform

• Well-capitalized and strong

• Over-leveraged

• Weak and vulnerable

What has not been observed despite asset price increases?

• A drop in consumer confidence

• A rise in inflation

• A substantial increase in borrowing

• A decrease in interest rates