Mester Says Fed Shouldn't Be Too Concerned With Moral Hazard Right Now

The transcript discusses the current market risks, particularly in the high yield space, and the Federal Reserve's unprecedented measures to mitigate the economic shock caused by the pandemic. It highlights the Fed's role in supporting firms affected by the virus and the importance of avoiding permanent damage to the economy. The discussion also touches on the moral hazards of these actions and the need for a strong recovery.

What is the main concern about the Federal Reserve's actions in the high yield space?

• Encouraging risky behavior

• Decreasing unemployment

• Reducing interest rates

• Increasing inflation

What is the Federal Reserve's primary goal during the pandemic shutdown?

• To increase stock market prices

• To increase consumer spending

• To mitigate negative economic impacts

• To reduce government debt

What are 'fallen angels' in the context of the Federal Reserve's new initiatives?

• Newly established startups

• High-risk investment funds

• Government bonds

• Companies with downgraded credit ratings

Why is it important for the Federal Reserve to avoid permanent damage to the economy?

• To reduce inflation

• To increase tax revenues

• To ensure a quick recovery

• To stabilize currency exchange rates

What unprecedented action is the Federal Reserve taking to support firms affected by the virus?

• Reducing government spending

• Increasing taxes

• Raising interest rates

• Implementing corporate debt programs