Fed Still Wants Rates to Be Primary Policy Tool, Natwest Markets Says

The transcript discusses the Federal Reserve's preference for using interest rates as the primary policy tool, despite showing flexibility with the balance sheet for technical reasons. It examines the perception of the Fed's actions as a capitulation and outlines the conditions, such as higher inflation, that might lead to future rate hikes. The discussion highlights the Fed's cautious approach in balancing economic growth and inflation control.

What is the Federal Reserve's preferred tool for policy adjustments?

• Interest rates

• Fiscal policy

• Balance sheet adjustments

• Quantitative easing

What is the primary reason the Fed might adjust the balance sheet?

• To respond to inflation

• To decrease unemployment

• For technical reasons related to reserves

• To stimulate economic growth

How does the Fed's current policy stance compare to a year ago?

• It is unchanged

• It is more accommodative

• It is close to neutral

• It is more aggressive

What might prompt the Fed to raise interest rates again?

• A stronger dollar

• A rise in GDP

• Higher inflation

• A decrease in unemployment

What does the Fed need to justify further rate hikes?

• A decrease in stock market volatility

• A significant rise in inflation

• A decline in housing prices

• An increase in consumer spending