Fed Sees Strengthening Case to Raise Rates

The Fed minutes reveal discussions on potential rate hikes, economic conditions, and inflation concerns. While most members agree on nearing full employment, they debate inflation's impact. Global events like Brexit and policy uncertainties are noted. The Fed also discusses long-term monetary policy, including balance sheet size, and explores the neutral rate's relation to the balance sheet. No final decisions are made, but ongoing discussions are highlighted.

What was the main concern among Fed members regarding the economy running hot?

• It might cause inflation to rise too quickly.

• It would lead to a decrease in employment.

• It could lead to a trade deficit.

• It would result in a stronger dollar.

Which international event was discussed as having an impact on the U.S. economy?

• The Tokyo Olympics

• The G20 Summit

• Brexit

• The Paris Climate Agreement

What was one of the domestic monetary policy topics discussed in the meeting?

• The effectiveness of a large balance sheet

• The implementation of a digital dollar

• The introduction of a new currency

• The reduction of federal taxes

What is the neutral rate of interest?

• The rate that neither stimulates nor restrains economic growth

• The rate that minimizes government debt

• The rate that maximizes employment

• The rate at which inflation is zero

What was the outcome of the discussion on the neutral rate of interest?

• It was decided to raise it

• No real agreement was reached

• It was agreed to keep it unchanged

• A decision was made to lower it