Yellen: Cautious Approach to Policy Is Appropriate

The video discusses the federal funds rate policy, emphasizing a cautious approach to monetary policy adjustments based on mixed economic indicators. It reviews recent economic developments, noting weak growth due to factors like soft exports and a hit energy sector. Business investment and household spending were also weak, but a rebound in spending is expected, supporting moderate economic expansion in the coming years.

What is the committee's approach to adjusting the federal funds rate?

• Immediate and significant increases

• Gradual increases over time

• No changes expected

• Decreases in the rate

Which factor was expected to weigh on economic growth?

• Rising oil prices

• Increased consumer spending

• Strong foreign demand

• Soft exports

What unexpected trend was observed in business investment?

• Stable investment across all sectors

• Significant growth in energy sector

• Weak investment outside of energy

• Increased investment in technology

Despite solid household income, what happened to household spending early in the year?

• It increased significantly

• It decreased slightly

• It slowed noticeably

• It remained stable

What is the expected trend for economic activity over the next few years?

• Decline

• Rapid expansion

• Moderate pace of growth

• Stagnation