Federal Reserve: What Can We Expect to Hear Tomorrow?

The transcript discusses the formality and preparation involved in FOMC meetings, highlighting Janet Yellen's meticulous approach. It covers expectations for changes in forward guidance, inflation targets, and economic indicators. The discussion also delves into labor market slack and its impact on Fed policy, as well as the Fed's strategy to manage market volatility and avoid a taper tantrum.

What is a notable characteristic of FOMC meetings as discussed in the transcript?

• They are informal gatherings with no records.

• They are open to the public.

• They are highly scripted and recorded.

• They are spontaneous and unplanned.

What shift in strategy is expected from the Fed according to the transcript?

• From quantitative easing to quantitative tightening.

• From data-dependent to date-dependent.

• From inflation-focused to employment-focused.

• From date-dependent to data-dependent.

What economic indicator is the Fed particularly focused on, as mentioned in the transcript?

• Core Personal Consumption Expenditure (PCE) price

• Gross Domestic Product (GDP)

• Consumer Price Index (CPI)

• Unemployment Rate

What challenge does Janet Yellen face in communicating the Fed's stance?

• Reducing unemployment without increasing inflation.

• Increasing interest rates without causing inflation.

• Making a significant policy change without alarming the markets.

• Implementing quantitative easing without market approval.

What does the Fed want to avoid, as discussed in the transcript?

• A decrease in inflation rates.

• A repeat of the 2013 taper tantrum.

• An increase in unemployment rates.

• A rise in consumer spending.