Fed's Powell Says Trade Tensions Could Lead to Higher Inflation

The video discusses the impact of trade policy on the economy, emphasizing that while trade policy is not directly managed by monetary authorities, it significantly affects economic productivity and global market access. The speaker highlights the benefits of trade, such as increased productivity and market expansion, while stressing the importance of maintaining free and fair trade practices. Potential negative outcomes, like increased protectionism, could harm the economy. Business concerns about higher costs and market loss are noted, though these issues have not yet appeared in economic data. Theoretical impacts include slower growth and higher inflation due to tariffs.

What is the primary responsibility of monetary authorities regarding trade policy?

• To manage monetary policy, not trade policy

• To ensure free and fair trade

• To negotiate trade agreements

• To set trade tariffs

What is one of the long-term benefits of trade mentioned in the video?

• Reduced global market access

• Increased government control

• Higher tariffs

• Increased productivity

What could be a positive outcome of the current trade processes?

• More widespread protectionism

• Higher tariffs

• Increased economic isolation

• Lower tariffs and better trade rule observance

What is a potential risk if protectionism increases globally?

• Lower inflation

• Improved global relations

• Economic growth

• Negative impact on the economy

What are businesses concerned about in the near term due to trade issues?

• Decreased costs

• Increased market access

• Lower inflation

• Loss of markets and higher costs