Fed Is More Willing to Overshoot on Rates: KPMG's Swonk

Fed Is More Willing to Overshoot on Rates: KPMG's Swonk

Assessment

Interactive Video

Business

University

Hard

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The transcript discusses the central bank's approach to managing inflation, emphasizing a preference for overshooting rather than undershooting due to improved balance sheets. It highlights lessons from past economic policies, such as the 1960s and 1970s stop-and-go strategies, and the importance of not repeating past mistakes. The discussion also covers future inflation targets, with a focus on maintaining a 2% goal and the potential for adjustments once inflation is under control.

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5 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Why are policymakers more inclined to risk overshooting in their economic strategies?

Because balance sheets have deteriorated.

To avoid reversing progress on inflation.

To stimulate the economy excessively.

Due to a lack of historical data.

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What historical periods are policymakers trying to avoid repeating mistakes from?

The 2000s and 2010s

The 1960s and 1970s

The 1980s and 1990s

The 1950s and 1960s

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the current inflation target that policymakers are committed to achieving?

1%

4%

2%

3%

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

When might policymakers consider adjusting the inflation target?

Once inflation exceeds 3%.

Before inflation reaches 2%.

After the current inflation battle is won.

Immediately, due to current economic conditions.

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the main reason for not moving the inflation target during a crisis?

To maintain credibility and focus.

To quickly adapt to changing conditions.

To increase economic growth.

To reduce interest rates.