What Was Learned From the Fed's Rate Hike?

The transcript discusses the economic forecasts and uncertainties surrounding the potential impact of fiscal stimulus under Donald Trump. It analyzes the Federal Reserve's decision to add an extra rate hike despite not meeting inflation targets, highlighting the confusion and potential risks involved. The discussion also covers the Fed's efforts to normalize rates and the implications of their accommodative stance on the economy, including the impact on the yield curve and the strengthening dollar.

What was the Fed's stance on incorporating Trump's fiscal stimulus into their forecasts?

• They partially incorporated it.

• They did not incorporate it.

• They fully incorporated it.

• They overestimated its impact.

Why was the Fed's decision to add an extra rate hike considered confusing?

• Because inflation was still below 2%.

• Because they met their inflation forecast.

• Because the economy was overheating.

• Because inflation was above 2%.

What was Janet Yellen's position on economic overheating?

• She encouraged it.

• She was in favor of it.

• She was against it.

• She was neutral.

What is the Fed's target for real Fed funds rates by the end of 2017?

• Negative 130 basis points

• Negative 40 basis points

• Zero basis points

• Positive 40 basis points

What potential risk is associated with a strong dollar according to the discussion?

• Higher unemployment

• Lower interest rates

• Decreased exports

• Increased inflation