Dartmouth's Danny Blanchflower Says Fed Should Wait

The transcript discusses the debate among Fed officials about tightening monetary policy, despite mixed economic indicators such as slower growth, rising unemployment, and flat investment. The credibility of the Fed is questioned due to differing views from other economic bodies. Additionally, the potential impact of the French elections on the EU and Fed's decisions is considered, with a call for caution and waiting before making policy changes.

What is the main concern about the Fed's potential tightening of monetary policy?

• There is a lack of evidence supporting the need for tightening.

• Unemployment rates are decreasing.

• The US economy is currently booming.

• Investment levels are rising.

Which economic indicator was mentioned as having slowed down, raising concerns about the Fed's decision?

• Wage growth

• Consumer spending

• Export levels

• Inflation

What is one argument in favor of raising interest rates according to the discussion?

• The unemployment rate is increasing.

• Investment levels are flat.

• Consumer spending was strong in the fourth quarter.

• The US economy is weaker than before.

What credibility issue does the Fed face according to the discussion?

• Inaccurate inflation predictions

• Misunderstanding of the labor market

• Overestimating consumer spending

• Underestimating fiscal stimulus

Why might the Fed consider waiting before making policy changes, as discussed in the context of European events?

• Because of strong economic growth in Europe

• To align with the Congressional Budget Office

• Due to uncertainty from the French elections

• To avoid influencing the US elections