Slok: Inflation, Jobs Top Brexit in Fed Rate Decision

The video discusses the state of the economy as it approaches full employment, highlighting the expected slowdown in employment growth and the rise in wages. It examines the Federal Reserve's considerations, including geopolitical factors like Brexit, and their impact on monetary policy decisions. The video also addresses market impatience and the Fed's cautious approach, emphasizing the importance of inflation and unemployment data. Additionally, it explores the quality of wage growth and the broadening of employment recovery to include more retail jobs. The discussion concludes with an analysis of unemployment rate targets and the challenges faced by the Fed in communicating their strategy to the markets.

What is expected to happen as the economy approaches full employment?

• Employment growth will accelerate.

• Inflation will decrease.

• Wages will increase due to more bargaining power.

• The Federal Reserve will lower interest rates.

What is the Federal Reserve's stance on interest rate changes as of June?

• They have decided to increase rates.

• They have ruled out any changes.

• They are planning to decrease rates.

• They are keeping the option open depending on data.

What is Charles Evans' view on the current monetary policy?

• He supports a 'wait and see' approach.

• He thinks the policy should focus on reducing inflation.

• He advocates for immediate rate hikes.

• He believes the policy should be more aggressive.

How has the job recovery been characterized in recent times?

• It has been stagnant with no significant changes.

• It has been limited to high-skilled jobs.

• It has expanded to include more retail sector jobs.

• It has focused solely on manufacturing jobs.

What challenge does the Federal Reserve face in communicating its policy trajectory?

• They have focused too much on geopolitical factors.

• They have been clear and consistent in their communication.

• They have been overly optimistic, leading to market skepticism.

• They have been too pessimistic about growth.