Clarida: Yellen Aiming to Raise Rates and Inflation

The transcript discusses the Federal Reserve's struggle to achieve its 2% inflation target and the concept of an inflation overshoot. It highlights the challenges faced by the Fed in raising rates with inflation below target, the dynamics within the FOMC, and the potential impacts of an inflation overshoot. The discussion includes insights into the Fed's communication strategy and the influence of committee members on decision-making.

What is the Federal Reserve's preferred measure of inflation that is currently lagging behind?

• Core CPI

• Core PCE

• Wage Growth

• U3 Rate

What is the Federal Reserve's approach to rate hikes as discussed in the second section?

• Immediate and aggressive

• Gradual and cautious

• No hikes planned

• Dependent on international markets

What internal challenge is the Federal Reserve facing according to the second section?

• International trade disputes

• High unemployment rates

• Split opinions within the committee

• Lack of economic data

According to Goldman Sachs, what would be the effect of an inflation overshoot on the U3 rate?

• Increase by 1%

• Remain unchanged

• Decrease by 4/10 of 1%

• Increase by 4/10 of 1%

What is a potential risk of consistently falling short of the average inflation target?

• Increased unemployment

• Loss of credibility

• Higher interest rates

• Deflation