Phelps: Inflation Expectations Moving up From Low Base

The video discusses the current state of inflation, focusing on oil prices and central bank policies. It highlights the expected rate rise in the US and its limited impact on inflationary expectations. The discussion also covers the deflationary forces and the slight inflationary pressures from the service sector. The impact of the Federal Reserve's policies on emerging markets is analyzed, considering the potential for interest rate adjustments. The video concludes with a look at global economic challenges, including excess savings, debt, and capacity, which may limit bond yield increases.

What is the central banks' likely response to inflation driven by oil prices?

• Reduce interest rates

• Implement strict monetary policies

• Let inflation run hot temporarily

• Increase interest rates significantly

What is the expected range for inflation according to the discussion?

• 1% to 2%

• 3% to 4%

• 0% to 1%

• 2% to 3%

How might emerging market assets be affected by the Federal Reserve's actions?

• They will only grow

• They could experience growth or face risks

• They will remain unaffected

• They will definitely decline

What is one of the challenges mentioned in the global economic adjustments?

• Shortage of oil

• Lack of globalization

• High inflation rates

• Excessive savings and debt

What is a potential limit to how far bond yields can go?

• Excess capacity in certain regions

• Low interest rates

• Government regulations

• High consumer demand