Lockhart: I Don’t See an Interest Rate Cut in the Foreseeable Future

The transcript discusses the Federal Open Market Committee's (FOMC) approach to inflation and interest rates, emphasizing a wait-and-see stance. It explores the Fed's credibility amidst political pressures and the importance of inflation expectations. The discussion includes global economic indicators like the Purchasing Managers Index (PMI) and the potential reevaluation of the Fed's policy framework, particularly the 2% inflation target. The impact of the US-China trade war on global economic stability is also examined.

What is the current stance of the FOMC regarding interest rates?

• They are in a wait-and-see mode.

• They have decided to cut rates immediately.

• They are planning to increase rates soon.

• They are unsure about their next move.

How does the Federal Reserve handle political pressures according to the transcript?

• They often change policies based on political advice.

• They ignore political pressures and focus on data.

• They prioritize political opinions over economic data.

• They consult with political leaders before making decisions.

What is the major variable influencing the Fed's policy decisions currently?

• Political stability

• Stock market performance

• Inflation

• Employment rates

Under what condition might the Fed consider changing interest rates?

• If inflation expectations are anchored at 1.5% or lower

• If employment rates increase significantly

• If the stock market shows volatility

• If political leaders demand a change

What is the Fed's current approach to its 2% inflation target?

• They have decided to increase the target to 3%.

• They are considering abandoning the target.

• They are reviewing their approach but have not made a decision.

• They are focusing solely on employment rates.

What is the expected impact of a US-China trade deal on the global economy?

• It will likely lead to a global economic slowdown.

• It will only benefit the US economy.

• It will eliminate uncertainty and boost economic performance.

• It will have no significant impact.

What is the current state of the global economy according to the transcript?

• It is experiencing a severe recession.

• It is showing signs of stabilization.

• It is rapidly declining.

• It is unaffected by the US-China trade war.