Powell Says Fed Is Willing to Use Crisis-Era Tools If There's a Recession

The transcript discusses the Federal Reserve's contingency planning in the event of a recession, focusing on the tools available from past crises and their effectiveness. It highlights the Fed's readiness to use these tools, addresses concerns about potential negative outcomes like inflation and asset bubbles, and emphasizes the importance of public engagement and clear communication in maintaining policy credibility and achieving assigned goals.

What is the Fed's approach to handling a potential economic downturn?

• Avoiding the use of crisis-era tools

• Relying solely on interest rate adjustments

• Using all appropriate tools, including the balance sheet

• Focusing only on inflation control

What was the outcome of the concerns raised about the tools used during the crisis?

• The concerns did not materialize

• High inflation was observed

• Asset bubbles were created

• The tools were deemed ineffective

How did the Fed's tools perform after hitting the zero lower bound?

• They led to increased unemployment

• They caused economic instability

• They generally worked well

• They were largely ineffective

What is the Fed's strategy for engaging with the public?

• Focusing only on professional economists

• Communicating only through press releases

• Engaging with both the profession and the public

• Avoiding public engagement

What is a key goal of the Fed's communication strategy in the current economic era?

• To maintain a credible inflation target

• To increase interest rates

• To focus solely on asset bubbles

• To reduce public engagement