The Chart to See Before the Fed Decision

What is one of the main challenges with using nominal rate cuts as a monetary policy tool?

• They are ineffective if rates are already low.

• They can lead to hyperinflation.

• They increase the national debt.

• They always result in a recession.

What does a flattening yield curve typically indicate?

• Increased consumer spending

• An upcoming economic boom

• A potential recession

• Stable economic growth

How do financial conditions affect interest rates according to the video?

• Tighter conditions lead to higher rates.

• Easier conditions always lead to lower rates.

• Easier conditions do not necessarily lead to higher rates.

• Tighter conditions have no impact on rates.

What is the Fed's preferred measure of inflation?

• Personal Consumption Expenditures (PCE)

• Producer Price Index (PPI)

• Gross Domestic Product (GDP) Deflator

• Consumer Price Index (CPI)

Why is there a debate about which inflation measure the Fed should focus on?

• CPI is above the target while PCE is below.

• Both CPI and PCE are above the target.

• Both CPI and PCE are below the target.

• CPI is below the target while PCE is above.