Fed’s Kaplan Says Three Rate Hikes are 'a Good Baseline'

The transcript discusses the Federal Reserve's pivot towards a faster pace of rate increases, with a baseline of three rate hikes for the year. It highlights the progress towards full employment and the challenges posed by inflation, influenced by global excess capacity and technological disruptions. The speaker emphasizes the importance of patience and flexibility in economic policy, considering the neutral rate to be closer to 2% than 3%. The current rates are seen as accommodative, but not excessively so, with a focus on gradually moving towards neutrality as the economy progresses.

What is the Federal Reserve's baseline for rate increases this year?

• One rate increase

• Two rate increases

• Three rate increases

• Four rate increases

Which factors are contributing to downward pressure on inflation?

• Rising oil prices

• Government fiscal policies

• Increased consumer spending

• Global excess capacity and technological disruptions

What does the term 'neutral rate' refer to in economic policy?

• A rate that stimulates economic growth

• A rate that restricts economic growth

• A rate that neither stimulates nor restricts economic growth

• A rate that is below the inflation rate

How does the Federal Reserve view the current rate setting in relation to the neutral rate?

• The current rates are restrictive

• The current rates are accommodative

• The current rates are neutral

• The current rates are above neutral

What is the Federal Reserve's approach to adjusting rates based on economic conditions?

• Increase rates regardless of economic conditions

• Decrease rates if the economy is strong

• Adjust rates based on economic growth and inflation progress

• Keep rates constant