Powell: Fed Rate Hike Moderation May Come in December

The transcript discusses the Federal Reserve's approach to achieving price stability by implementing ongoing rate increases. It highlights the effects of monetary policy on the economy and inflation, noting the uncertain lags in these effects. The text suggests moderating the pace of rate increases as the desired level of restraint is approached. It emphasizes that the timing of moderation is less significant than determining how much further rates need to rise and how long they should remain restrictive. Historical lessons caution against premature policy loosening, and the commitment to maintaining restrictive policy until inflation is controlled is reiterated.

What is the primary goal of the anticipated ongoing rate increases discussed in the first section?

• To increase economic growth

• To reduce inflation to 2% over time

• To decrease unemployment

• To stabilize the stock market

Why is it important to moderate the pace of rate increases as mentioned in the second section?

• To boost international trade

• To increase consumer spending

• To reach the level of restraint needed to lower inflation

• To avoid economic recession

When might the moderation of rate increases begin, according to the second section?

• In the next quarter

• At the December meeting

• At the end of the year

• In the next fiscal year

What does the final section suggest about the duration of holding a restrictive policy level?

• It should be adjusted monthly

• It should be maintained for some time to restore price stability

• It should be brief to avoid economic slowdown

• It should be flexible based on market conditions

What caution does history provide regarding monetary policy, as mentioned in the final section?

• Against focusing solely on inflation

• Against increasing rates too quickly

• Against maintaining a restrictive policy for too long

• Against prematurely loosening policy