Fed's Powell Says Case Remains 'Strong' for Gradual Rate Hikes

The US economy is performing well, with growth above long-term trends and a robust labor market. Unemployment is at its lowest since 2000, and inflation is nearing the 2% target. High demand for workers supports wage growth, though the US lags in labor force participation compared to other advanced economies. A tight labor market may boost investment in technology and training, benefiting productivity and minority groups. Achieving maximum employment with price and financial stability is a challenge. With low unemployment and balanced risks, gradual increases in the federal funds rate are justified.

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

• It is performing poorly with high unemployment.

• It is performing well with growth above long-term trends.

• It is stagnant with no significant growth.

• It is declining with increasing inflation.

How does a tight labor market benefit businesses?

• By reducing the need for technology.

• By decreasing the demand for workers.

• By encouraging investment in technology and training.

• By lowering productivity growth.

What challenge does the US face in achieving its statutory goal?

• Increasing inflation to 5%.

• Reducing unemployment to zero.

• Eliminating all forms of monetary policy.

• Balancing maximum employment with price and financial stability.

What was the need for monetary policy earlier in the economic expansion?

• To provide highly accommodative monetary policy.

• To maintain high inflation.

• To increase unemployment.

• To decrease the federal funds rate.

What is the current stance on the federal funds rate?

• It should be decreased rapidly.

• It should remain unchanged.

• It should be increased gradually.

• It should be eliminated.