Nearly Every Fed Tightening Cycle Ends in Recession Says Janet Henry of HSBC

The video discusses the Federal Reserve's current patient stance on interest rates due to slower global growth and lower-than-expected inflation. It explores the possibility of future rate hikes if global growth improves and the China stimulus takes effect. The risks of policy mistakes, such as raising rates only to cut them shortly after, are highlighted. The video also provides an economic outlook for 2020, predicting potential rate cuts as fiscal stimulus fades and unemployment rises.

What is the current consensus among Fed governors regarding the policy rate?

• It is too high and needs to be lowered.

• It is at or near neutral.

• It is irrelevant to current economic conditions.

• It is too low and needs to be increased.

What global economic condition is allowing the Fed to be patient?

• Rapid global growth

• High inflation rates

• Slower global growth

• Increasing unemployment

What could prompt the Fed to consider raising rates in the future?

• A decrease in US unemployment and rising wage growth

• A decline in global economic growth

• A significant drop in inflation

• An increase in fiscal stimulus

What is a common outcome of Fed tightening cycles?

• Stable economic growth

• Economic expansion

• Recession

• Deflation

What unique period in the mid-1990s is noted for avoiding a recession after a Fed tightening cycle?

• The early 1990s

• The mid-1990s

• The late 1980s

• The early 2000s