Yellen: Economic Outlook Is Highly Uncertain

The video discusses how the federal funds rate is adjusted in response to changes in the economic outlook and associated risks. It highlights the potential impact of fiscal policy and other economic factors on the outlook and monetary policy. The decision-making process for policy is based on economic conditions, aiming for maximum employment and 2% inflation. The video also covers the reinvestment strategy for maturing treasury securities and mortgage-backed securities until the normalization of the federal funds rate is well underway.

What will influence the adjustments to the federal funds rate?

• The stock market performance

• The current weather conditions

• The opinions of international leaders

• Changes in the economic outlook and associated risks

Which of the following is NOT mentioned as a factor influencing the economic outlook?

• Technological advancements

• Fiscal policy

• Monetary policy

• Economic conditions

What are the objectives mentioned in relation to assessing economic conditions?

• Maximum employment and 2% inflation

• High GDP growth and low unemployment

• Stable currency and balanced trade

• Increased exports and reduced imports

What will continue until the normalization of the federal funds rate is well underway?

• Expansion of the stock market

• Reinvestment of proceeds from maturing treasury securities

• Increase in government spending

• Reduction of interest rates

What type of securities are mentioned in the reinvestment policy?

• Corporate bonds

• Cryptocurrencies

• Agency debt and mortgage-backed securities

• Foreign exchange reserves