Fed Is Making a Mistake Raising Rates, Moody's Economist Ozimek Says

The transcript discusses the Federal Reserve's repeated mistake in underestimating labor market slack, leading to premature rate hikes. It highlights the need for better measurement methods, such as considering the employment-to-population ratio. The negative impact includes slower economic recovery and fewer jobs. Criticism of the Fed's actions is addressed, along with potential corrective measures like pausing rate hikes to avoid further economic disruption.

What was the initial unemployment rate estimate by the Fed when they started raising rates?

• 5.5%

• 4.9%

• 5.0%

• 4.5%

How many workers are estimated to have been affected by the Fed's early rate hikes?

• Between 100,000 and 500,000

• Between 1.5 million and 2 million

• Between 500,000 and 1 million

• Between 1 million and 1.5 million

What is one reason suggested for the Fed's reluctance to adjust their unemployment rate estimates?

• Technological limitations

• Ideological reasons

• Political pressure

• Lack of data

What corrective measure is suggested to address the Fed's mistake?

• Increase interest rates

• Pause the rate hikes

• Increase taxes

• Reduce government spending

What is the potential risk of the Fed's current path according to the discussion?

• Decreased unemployment

• Economic shocks disrupting recovery

• Increased inflation

• Rapid economic growth