Mester Says Fed Won't Rule Out 75-Bps Hike Forever

The transcript discusses the Federal Reserve's approach to managing inflation through interest rate adjustments. It explores the potential for 50 or 75 basis point moves and the implications for unemployment and economic growth. The conversation highlights the need to align demand with constrained supply and the importance of using monetary tools to achieve a 2% inflation goal. The discussion also covers the impact of economic indicators like GDP and consumer spending on policy decisions, emphasizing the goal of maintaining healthy labor markets while controlling inflation.

What is the primary goal of adjusting interest rates according to the first section?

• To increase consumer spending

• To align demand with constrained supply

• To boost government spending

• To decrease unemployment

Why might unemployment rise as interest rates are increased?

• Because it reduces excess demand

• Because it leads to higher inflation

• Because it encourages more hiring

• Because it boosts economic growth

What is a potential consequence of tightening financial conditions mentioned in the second section?

• Increased government spending

• Lower interest rates

• Higher consumer demand

• Negative growth periods

Which factor was a significant negative for growth in the first quarter according to the third section?

• Consumer spending

• Business investment

• Government spending

• Trade

What is the ultimate goal of controlling inflation as discussed in the third section?

• To reduce trade deficits

• To increase government spending

• To boost inventory levels

• To achieve maximum employment