Fed Minutes Show Rate Hike Expectations Scaled Back

Fed Minutes Show Rate Hike Expectations Scaled Back

Assessment

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Business, Social Studies

University

Hard

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The transcript discusses a meeting of policymakers who noted stronger economic growth and slower disinflation progress. They faced uncertainty due to the US banking situation. Despite some members initially considering a 50 basis point rate increase, they ultimately agreed on a 25 basis point increase, citing a strong banking system. The Fed staff revised their forecast to a mild recession by the end of 2023. The meeting focused on balancing inflation risks with potential banking issues, leading to a decision to raise interest rates while keeping future options open.

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5 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What was the main concern of policymakers regarding the US economy?

High unemployment rates

Slower progress on disinflation

Uncertainty in the banking sector

Stronger than expected economic growth

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What did some participants initially consider for the interest rate move?

A 75 basis point increase

A 50 basis point increase

A 25 basis point decrease

No change in the rate

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What was the Fed staff's revised economic forecast for the end of 2023?

Strong economic growth

A mild recession

Stable economic conditions

High inflation

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What decision did all participants agree on regarding the target rate?

To raise it by 1/2 percentage point

To raise it by 1/4 percentage point

To keep it unchanged

To decrease it by 1/4 percentage point

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What was the primary reason for the Fed's decision to raise the rate?

Concerns about unemployment

Global economic conditions

Risks of inflation outweighing banking issues

Pressure from Wall Street