Rogoff Says 6% Fed Funds Rate Wouldn't Be a Surprise

The transcript discusses the debate over inflation targets, with figures like Blanchard, Stiglitz, and Adam Posen suggesting different levels. The conversation explores whether the 2% inflation target should be reset, considering political and economic factors. It highlights the political nature of economic decisions, especially in the context of deglobalization and the labor market's distortions. The discussion also touches on the uncertainty in setting interest rates and the potential for inflation to remain elevated longer than expected.

What was the uproar about in the context of inflation targets?

• The proposal to increase inflation to 4%

• The suggestion to lower inflation to 1%

• The idea of eliminating inflation targets

• The decision to keep inflation at 2%

What is the potential outcome of allowing inflation to remain higher for longer?

• A rapid economic decline

• A soft landing

• A complete economic overhaul

• A return to pre-crisis inflation levels

How does the shift in roles within the economic council highlight the nature of inflation decisions?

• It indicates a lack of understanding of inflation

• It emphasizes the political nature of economic decisions

• It shows the technical challenges of inflation control

• It suggests a move towards a free-market approach

What is a potential consequence of the distortions in the labor market?

• A stabilization of the economy

• A decrease in interest rates

• A rise in interest rates to 6%

• An increase in inflation

Why is the decision on inflation targets considered political?

• Because it is based solely on economic data

• Because it is decided by a single individual

• Because it affects different groups in the same way

• Because it impacts people differently and involves trade-offs