Fed Won't Be Easing for Quite Some Time, TD's Misra Says

The video discusses the current state of inflation, noting that goods inflation is declining while service inflation remains high. The Federal Reserve's approach to interest rates is examined, with predictions of further hikes to achieve a 2% inflation target. The need for demand destruction, particularly in the labor market, is highlighted as crucial for reducing inflation. The video also addresses market optimism about future rate cuts, cautioning against underestimating the Fed's commitment to controlling inflation. The overall outlook suggests a prolonged period of high rates until inflation stabilizes.

What is the current trend in goods inflation according to the speaker?

• It is unpredictable.

• It is stable.

• It is declining.

• It is increasing.

Why does the speaker believe the market is too optimistic about service inflation?

• Because service inflation is easy to control.

• Because goods inflation is more important.

• Because service inflation has historically been sticky on the way down.

• Because the Federal Reserve has already achieved its target.

What does the speaker suggest is necessary to achieve the Federal Reserve's inflation target?

• Increased consumer spending.

• More demand destruction, especially in the labor market.

• Higher commodity prices.

• Stable wage growth.

What is the speaker's view on the Federal Reserve's response to labor market data?

• The Federal Reserve is likely to be late in responding.

• The Federal Reserve has already responded adequately.

• The Federal Reserve is proactive.

• The Federal Reserve ignores labor market data.

What is the Federal Reserve's likely stance on interest rates according to the speaker?

• They will increase rates indefinitely.

• They will stop hiking rates immediately.

• They will maintain high rates for a long time.

• They will cut rates soon.