Davies: Need a Clear, Coherent Message From Yellen

The transcript discusses the challenges faced by the Federal Reserve in communicating a coherent message due to diverse opinions within the FOMC, similar to the British Monetary Policy Committee. It highlights the impact of the rising dollar and interest rates on monetary policy. The discussion also covers the decline in productivity, particularly in the service sector, and the difficulties in measuring it accurately.

What is a significant challenge the Federal Reserve faces in communicating its policies?

• Diverse opinions among its members

• Pressure from international markets

• Lack of technological tools

• Insufficient data on inflation

What factor is considered by the Federal Reserve when deciding on interest rate hikes?

• The stock market performance

• The level of public debt

• The appreciation of the dollar

• The unemployment rate

How does the rising dollar affect monetary conditions according to the discussion?

• It causes a tightening of monetary conditions

• It leads to increased inflation

• It boosts consumer spending

• It results in higher unemployment

What is a challenge in measuring productivity in the service sector?

• High operational costs

• Rapid technological changes

• Lack of skilled labor

• Difficulty in quantifying output

What is one reason for the decline in productivity mentioned in the discussion?

• Global economic slowdown

• Rising labor costs

• Diminished impact of new technologies

• Increased government regulations