Expect Inflation to Be Stickier, BofA's Gapen Says

The transcript discusses the Federal Reserve's recent policy actions and market reactions, focusing on the balance between rate hikes and balance sheet runoff. It highlights the Fed's cautious approach, the potential for continued tightening, and the economic impact of these measures. The discussion also touches on the timing of the tightening cycle's effects on economic data and growth expectations for 2023.

What is the main challenge for the Fed when trying to maintain a hawkish stance while slowing down rate hikes?

• Managing international trade relations

• Maintaining credibility while slowing down

• Communicating effectively with the public

• Balancing inflation and unemployment

What is the current debate regarding the Fed's balance sheet?

• Whether to focus solely on interest rates

• Whether to stop reducing the balance sheet immediately

• Whether to continue reducing the balance sheet while cutting rates

• Whether to increase the balance sheet

What does Governor Waller suggest about the balance sheet?

• To consider running the balance sheet off for longer

• To stop the balance sheet runoff immediately

• To ignore the balance sheet and focus on rates

• To increase the balance sheet significantly

When are the effects of the Fed's tightening cycle expected to be fully visible in economic data?

• Between 12 to 24 months

• Immediately after the policy change

• After 5 years

• Within 6 months

What are the growth expectations for 2023 compared to 2022?

• Unchanged from 2022

• Stronger than 2022

• Unpredictable

• Weaker than 2022