Widening Deficits May Weigh Down on Dollar in Long Term, Oxford Economics Says

The video discusses the impact of rising oil prices on core inflation and the Federal Reserve's likely response, considering these price increases as transitory. It also examines the potential economic effects of US-China trade tensions, including tariffs, on growth and inflation. Lastly, the video analyzes the US dollar's strength, driven by economic growth and monetary policy differentials, while noting potential future challenges from trade and fiscal deficits.

How does the Federal Reserve view the recent increase in oil prices?

• As a sign of a breakout in core inflation

• As a transitory shock not warranting aggressive measures

• As a reason to lower interest rates

• As a permanent change requiring immediate action

What is the expected impact of US-China tariffs on the US economy?

• Increase in long-term economic growth

• Permanent rise in inflation

• Immediate reduction in trade deficit

• Temporary inflation increase and negative growth impact

How is the Federal Reserve likely to respond to the economic effects of tariffs?

• By ignoring the economic effects of tariffs

• By prioritizing inflation control over growth

• By focusing on mitigating growth decline

• By increasing interest rates immediately

What factors have contributed to the recent strength of the US dollar?

• A narrowing US trade deficit

• A reduction in global trade tensions

• A decrease in US interest rates

• US economic growth outpacing other regions

What long-term factors might weigh down the US dollar?

• A decrease in US fiscal deficit

• A widening trade and fiscal deficit

• A decrease in global oil prices

• A strengthening of emerging market economies