Ex-Fed President Stern Says Fed Expects Criticism as Rates Go Up

The transcript discusses the relationship between the President and the Federal Reserve, highlighting that while the President can comment on policy, the Fed operates independently to ensure economic stability. It emphasizes the importance of public support for Fed policies and addresses public concerns about interest rate changes. The Fed expects criticism regardless of whether rates are high or low, as different groups are affected differently. Overall, the Fed aims to balance economic performance with public sentiment.

What is the primary role of the Federal Reserve in relation to the President's comments on policy?

• To follow the President's directives

• To consider the President's comments but act independently

• To ignore the President's comments entirely

• To change policies based on public opinion

Why is public support crucial for the Federal Reserve's policies?

• It ensures the Fed can operate without government oversight

• It prevents the Fed from being criticized by the President

• It helps the Fed implement policies effectively

• It allows the Fed to increase interest rates without concern

What has been the public's reaction to gradual interest rate increases by the Fed?

• Calls for faster rate increases

• Widespread concern and protests

• General acceptance and minimal concern

• Demand for immediate rate cuts

Under what conditions might public concern about the Fed's policies increase?

• If inflation remains stable

• If the economy performs well

• If interest rates decrease

• If economic performance deteriorates

Who criticized the Fed when interest rates were very low, and why?

• Politicians, due to increased inflation

• Investors, because of high returns

• Retirees and savers, due to low returns

• Businesses, because of high borrowing costs