Schoenholtz: Fed Is Rule-Like, but Not Slavish to Rules

The video discusses the Federal Reserve's rule-like behavior and its impact on monetary policy. It compares the views of economists like John P Taylor and Kim Schoenholtz on market rules. The discussion also covers the Fed's political independence, the role of presidential appointments, and criticisms of rule-based approaches. The Fed's mandate to keep inflation low and stable is highlighted, along with the potential risks of Congress becoming more involved in monetary policy decisions.

What is one of the benefits of the Federal Reserve being more rule-like in its approach over the last 30 years?

• Greater political control

• Increased inflation expectations

• Higher bond yields

• More flexibility to respond to economic shocks

What has been a significant factor in the Federal Reserve's independence from political control?

• Presidential restraint in criticism

• Frequent changes in leadership

• Direct involvement of Congress

• High inflation rates

What authority does the President have concerning the Federal Reserve?

• Appointing the Fed Chair

• Setting interest rates

• Determining inflation targets

• Controlling monetary policy

What is a criticism of applying the New Zealand model to the United States' monetary policy?

• The US has a higher inflation rate

• New Zealand is not as large and complex as the US

• The US economy is not as global

• New Zealand's economy is too complex

What is the primary mandate of the Federal Reserve as discussed in the video?

• To control global markets

• To increase inflation

• To maintain low and stable inflation and output

• To monitor political decisions