Should the Fed Be Worried About Low Inflation?

The video discusses concerns about low inflation in the U.S., as highlighted by Janet Yellen and the FOMC minutes. It explains the Fed's preferred inflation gauge, the Personal Consumption Expenditures Price Index, which has been below target for an extended period. The video also examines inflation expectations, particularly the five-year forward break-even inflation rate, which is at a 14-year low. The Fed's discussions on inflation expectations are ongoing, with no firm conclusions yet.

What did Janet Yellen indicate about inflation in relation to the labor market?

• It will decrease as the labor market weakens.

• It will fluctuate unpredictably.

• It will move up towards the Fed's target as the labor market strengthens.

• It will remain stable regardless of the labor market.

What is the Fed's preferred measure of inflation?

• Personal Consumption Expenditures Price Index

• Producer Price Index

• Gross Domestic Product Deflator

• Consumer Price Index

For how many consecutive months has the Fed's preferred inflation gauge been below target?

• 31 months

• 12 months

• 36 months

• 24 months

What is the current reading of the five-year forward break-even inflation rate?

• 2.5%

• 1.9%

• 3.0%

• 2.0%

What conclusion did the Fed reach regarding future inflation expectations?

• They concluded it would remain stable.

• They decided it required more time and analysis.

• They concluded it would rise sharply.

• They decided it was not a concern.