Lockhart: Fed's 'Catch Up' Phase Is Over

Jay Powell's press conference highlights the ongoing rate increases and the transition to a new phase where decisions will be made meeting by meeting. The discussion covers the concept of neutral rates, the current economic situation, and the risks of recession. Powell emphasizes the importance of monitoring inflation expectations and the challenges of forward guidance in uncertain times.

What did Jay Powell indicate about the future of rate increases?

• They will stop immediately.

• They will continue but be assessed meeting by meeting.

• They will decrease significantly.

• They will remain unchanged.

According to Jay Powell, what is a key factor in denying a recession?

• Decreasing commodity prices

• High inflation rates

• Low GDP growth

• Strong employment market

What is the Fed's stance on inflation expectations?

• They believe expectations are unanchored.

• They are not concerned about expectations.

• They are closely monitoring inflation expectations.

• They have no plans to address expectations.

What is the main risk if the Fed continues to hike rates?

• A decrease in employment

• An economic boom

• An overshoot leading to recession

• A stable economy

What does the Fed need to see before slowing down rate increases?

• A single positive inflation reading

• A series of positive inflation readings

• A decrease in employment

• An increase in GDP

What challenge does forward guidance face according to the transcript?

• It can be a hindrance if wrong.

• It is not needed in economic policy.

• It is the only tool for central banks.

• It is always accurate.

How does the Fed plan to approach future rate hikes?

• By ignoring economic indicators

• By following a strict schedule

• By relying on data and remaining non-committal

• By setting fixed rates for the next year