Cathie Wood Wouldn't Be Surprised to See Fed Cut in 2023

The video discusses the potential for the Federal Reserve to cut interest rates due to deflation risks. It differentiates between good and bad deflation, emphasizing that good deflation can drive demand through innovation and cost reductions. The discussion highlights how companies like Tesla are able to reduce prices by leveraging cost curve declines, particularly in battery technology, as supply chain issues subside.

What is one reason the Federal Reserve might cut rates this year?

• To combat inflation

• To address deflation risks

• To increase employment

• To stabilize the housing market

What is a characteristic of bad deflation?

• It is driven by technological innovation

• It results from demand destruction

• It leads to increased consumer spending

• It is beneficial for economic growth

How does good deflation create demand?

• By increasing interest rates

• By increasing prices

• By reducing costs through innovation

• By limiting supply

Why is Tesla able to cut prices according to the video?

• Due to increased competition

• Because of supply chain improvements

• Due to government subsidies

• Because of a decline in demand

What is the relationship between cost curves and price declines?

• Cost curves are unrelated to price changes

• Cost curves increase as prices decline

• Cost curves remain constant as prices decline

• Cost curves decline, leading to price declines