Going the Wrong Way: Fed Rate Increase Deflating?

The video discusses the current economic changes and their impact on central bank plans, focusing on inflation concerns. It highlights factors like the rising dollar, commodity price collapse, and agricultural output affecting inflation. The risks of deflation and its psychological impact on spending are explored, along with changing economic expectations. The central bank's potential response, including delaying rate changes due to disinflationary trends and global demand shifts, is also covered.

What is the Federal Reserve's favorite measure of inflation?

• Consumer Price Index (CPI)

• GDP Deflator

• Producer Price Index (PPI)

• PCE Core Index

How does a stronger dollar affect imported goods?

• Makes them more expensive

• Has no effect

• Increases their demand

• Makes them cheaper

What has been the effect of a bumper year in agriculture?

• Increased food prices

• Decreased food prices

• No change in food prices

• Increased demand for imports

What is a potential risk if deflation becomes embedded in psychology?

• Higher interest rates

• Decreased spending

• Stable prices

• Increased spending

What could delay the Federal Reserve's rate move according to analysts?

• Rising inflation

• Stable global demand

• Falling inflation

• Increased commodity prices