Yellen Says Gradual Rate Hikes Are Still Warranted

The video discusses the current economic projections, highlighting stronger GDP growth and softer core inflation. It explains the Federal Reserve's decision to maintain the federal funds rate while expecting gradual increases to support a healthy labor market and stabilize inflation. The concept of the neutral rate is explored, noting its current low level and the expectation of future increases. The video concludes with the anticipation of additional rate hikes to sustain economic expansion, while acknowledging that the long-term neutral rate will likely remain below historical levels.

What is the current trend in real GDP growth according to the transcript?

• It is declining.

• It is slightly stronger.

• It is unchanged.

• It is significantly weaker.

What decision did the committee make regarding the federal funds rate?

• To increase it immediately.

• To maintain its current target.

• To eliminate it.

• To decrease it significantly.

Why does the committee expect gradual increases in the federal funds rate?

• To increase unemployment.

• To support a healthy labor market and stabilize inflation.

• To decrease inflation rapidly.

• To reduce economic growth.

What is the neutral federal funds rate described as?

• A rate that is highly volatile.

• A rate that is expansionary.

• A rate that is contractionary.

• A rate that is neither expansionary nor contractionary.

How does the current neutral rate compare to historical standards?

• It is unpredictable compared to historical standards.

• It is the same as historical standards.

• It is quite low by historical standards.

• It is higher than historical standards.