Fed May Have to Raise Rates More Than Expected: Citi

The transcript discusses the current economic indicators, highlighting softer price data and the Federal Reserve's policy stance. It explores the potential terminal rate range of 5.25% to 5.5% and considers future economic conditions, including wage growth and service inflation. The discussion emphasizes the need for the Federal Reserve to reassess its policy rate to effectively manage inflation and economic growth.

What recent economic data has shown signs of softness, according to the transcript?

• Core CPI and PCE inflation

• Consumer confidence levels

• Stock market indices

• Unemployment rates

What is the current target range for the Federal Reserve's terminal rate?

• 5.25% to 5.5%

• 4.0% to 4.5%

• 3.5% to 4.0%

• 6.0% to 6.5%

What might cause the Federal Reserve to reassess their terminal rate?

• Rising wage growth and sticky service inflation

• Improving trade balance

• Increasing foreign investments

• Decreasing oil prices

What is the Federal Reserve's strategy to control inflation?

• Reduce interest rates

• Encourage foreign trade

• Slow down the economy and loosen the labor market

• Increase government spending

Why might the Federal Reserve consider moving at a slower pace with policy adjustments?

• To avoid political backlash

• To better understand the appropriate rate

• To increase consumer spending

• To boost stock market performance