State Street's Lacaille on Why Efficacy Matters

The video discusses the declining efficacy of monetary policy, highlighting challenges faced by policymakers like Janet Yellen and Stan Fisher. It explores the tools used, such as credit easing, and their limited impact on economic growth. The discussion extends to investment strategies in uncertain times, emphasizing realistic expectations and risk management. Finally, the potential role of fiscal policy in addressing economic challenges is examined, considering its long-term impact and the importance of choosing the right projects.

What is the main concern regarding the efficacy of monetary policy discussed in the video?

• The governors are unanimous on inflation.

• Monetary policy is more effective than before.

• Fiscal policy is the only solution.

• The link between monetary policy and growth is weakening.

Which tool is mentioned as being used to inject cash into the system?

• Government spending

• Credit easing

• Interest rate hikes

• Tax cuts

What should investors focus on during uncertain times according to the video?

• Chasing high-risk assets

• Rebasing expectations realistically

• Ignoring market trends

• Investing only in bonds

What is the role of fiscal policy as discussed in the video?

• It is irrelevant in current economic conditions.

• It is more effective than monetary policy.

• It takes time and requires careful project selection.

• It is a quick fix for economic issues.

How does the video suggest we interpret a flat yield curve?

• As a reason to increase interest rates

• As an indication of strong economic growth

• As a reflection of demographic influences

• As a sign of imminent recession