Fed 'Horribly Offside' on Inflation: JPMorgan's Michele

The transcript discusses the impact of repricing real rates on economic activity, highlighting the Fed's strategy to control inflation through rate hikes. It explores the potential for a recession, debating whether it will be short and shallow or more severe. The discussion also covers the risks associated with excessive liquidity and low funding costs, suggesting that something in the economy may 'pop' due to these conditions.

What economic activities are being impacted by the Fed's rate hikes?

• Tourism and hospitality industry

• Technology investments and stock market

• Auto sales, housing, and credit card purchases

• Agricultural exports and imports

What is the potential Fed funds rate discussed in the video?

• 6%

• 5%

• 4%

• 3%

What is the base case scenario mentioned for the economy?

• A prolonged recession

• Stagnant economic growth

• A short and shallow recession

• A booming economy

What problem is the Fed primarily fighting according to the video?

• A 40-year inflation problem

• A recent stock market crash

• A decline in technology investments

• A housing market bubble

What is a potential consequence of excessive liquidity mentioned in the video?

• Improved stock market performance

• Higher tourism rates

• Increased agricultural exports

• Financial instability