Fed Chair Powell Signals Smaller Rate Hikes Ahead

The transcript discusses the need for a restrictive policy to control inflation, anticipating ongoing rate increases and predicting higher ultimate rate levels. It considers the timing for moderating rate increases, possibly as soon as December, and emphasizes the importance of maintaining a restrictive policy to restore price stability. The transcript warns against prematurely loosening policy despite some promising developments, highlighting the long journey ahead to achieve price stability.

What is the primary goal of maintaining a restrictive policy level?

• To boost consumer spending

• To reduce unemployment

• To increase economic growth

• To return inflation to 2%

Why might the ultimate level of rates need to be higher than previously thought?

• Due to unexpected economic growth

• Because of higher inflation expectations

• To support the housing market

• To align with global interest rates

When might the pace of rate increases begin to moderate?

• After inflation reaches 3%

• As soon as the December meeting

• In the next fiscal year

• At the September meeting

What does history caution against in terms of policy?

• Reducing government spending

• Increasing rates too quickly

• Loosening policy prematurely

• Maintaining a stable policy

What is necessary to restore price stability according to the final section?

• Increasing consumer spending

• Holding policy at a restrictive level for some time

• Immediate policy loosening

• Reducing interest rates