Fed Draws Fine Line With Wait and See Policy

The transcript discusses the Federal Reserve's decision-making process, highlighting the influence of political factors, particularly the upcoming election. It explores how the Fed's actions, or lack thereof, are influenced by potential market reactions to the election results. The discussion includes the possibility of a rate hike in December, contingent on the election outcome, and the implications of political changes on economic policy.

Why did the Federal Reserve decide not to take action in November?

• They were waiting for a huge incident to occur.

• They were influenced by Eric Rosengren's dissent.

• They had already decided to act in January.

• They were waiting for the election results.

What is the expected Federal Reserve action if Hillary Clinton wins the election?

• A quarter point rate hike in December.

• A complete halt on rate changes.

• An immediate rate cut.

• A delay in any rate decision until January.

How might the Federal Reserve react if Donald Trump wins the election?

• They might delay the rate hike.

• They will definitely increase the rates.

• They will ignore the election outcome.

• They will cut the rates immediately.

What is a potential concern for the Federal Reserve if the markets crash after a Trump election?

• Being praised for their quick response.

• Being criticized for not acting sooner.

• Being seen as supportive of the election outcome.

• Being seen as intimidated by the election.

What is the balance the Federal Reserve is trying to maintain in their decision-making process?

• International relations and domestic policies.

• Economic fundamentals and political reactions.

• Public opinion and market trends.

• Short-term gains and long-term stability.