Should the Fed Do Better in Communicating?

The video discusses the shift from calendar-based to data-driven guidance by the Federal Reserve (Fed). It emphasizes the need for the Fed to communicate more clearly about their data-dependent strategies, particularly regarding inflation expectations and interest rates. The speaker highlights the importance of understanding both consumer and market expectations of inflation, noting discrepancies between survey-based and market-based measures. The Fed's challenge is to convince the public and markets that inflation will rise to the desired 2% level.

What is the main shift in guidance that the Fed is moving towards?

• Interest rate guidance

• Inflation-based guidance

• Data-driven guidance

• Calendar-based guidance

According to the speaker, what should the Fed clarify in their communication?

• The exact date of interest rate changes

• The factors influencing future decisions

• The specific inflation rate target

• The unemployment rate target

What does the speaker suggest about the Fed's approach to inflation expectations?

• They should raise interest rates regardless of expectations

• They should focus solely on wage increases

• They should ignore inflation expectations

• They should communicate clearly about not raising rates if inflation expectations are low

How do consumer inflation expectations compare to Wall Street's according to the speaker?

• Wall Street's expectations are not mentioned

• Consumers expect lower inflation than Wall Street

• Consumers expect higher inflation than Wall Street

• Both have the same expectations

What is the problem with the public's inflation expectations according to the speaker?

• They are too low

• They are too high

• They are biased upwards

• They are not relevant