Univ. of Michigan Prof. Stevenson on Fed Pause

The video discusses the economic outlook, focusing on the potential for a soft landing, the impact of inflation and unemployment, and the Federal Reserve's stance on controlling inflation. It highlights the challenges in determining the neutral rate and the implications of labor market activism on wage inflation. The Fed aims to reduce inflation without significantly increasing unemployment, while labor strikes test the balance of bargaining power.

What challenges does the Federal Reserve face in predicting the neutral rate and its effects on the economy?

What are the implications of sustained low unemployment on inflation and wage increases?

How do labor strikes impact the overall economy and the negotiation power of workers?