Fed Will Need to Cut Back to Lower Bound: NatWest Economist Girard

The transcript discusses the pressure on the Federal Reserve to act due to market conditions, with predictions of a 50 basis point cut by March. It highlights the uncertainty caused by the coronavirus crisis and its potential short-term economic disruption. The Fed's response to these challenges, including the possibility of reaching the zero lower bound, is explored. The discussion also covers the potential for a V-shaped economic recovery and the Fed's cautious approach to reversing rate cuts.

What is the main reason for the pressure on the Federal Reserve to act at its March meeting?

• The desire to increase interest rates

• A strong economic rebound

• Market conditions and economic risks

• Pressure from the G7

What is the expected impact of the coronavirus on consumer demand in the US?

• A temporary increase in demand

• No impact on consumer demand

• Increased consumer spending

• A decrease in consumer demand

What is the Fed's anticipated response if the economic impact of the coronavirus is short-lived?

• A V-shaped economic rebound

• Immediate increase in interest rates

• No change in monetary policy

• A quick reversal of rate cuts

How does the Fed plan to handle rate cuts once the economy starts growing again?

• Quickly reverse the rate cuts

• Introduce new rate cuts

• Maintain the rate cuts for a longer period

• Increase rates immediately

What is the Fed's approach to moving off the zero lower bound compared to last time?

• They will increase rates before inflation targets are met

• They will not reach the zero lower bound

• They will wait longer before reversing rate cuts

• They will move off the zero bound more quickly