Alexander Friedman: Fed's Risky New Global Mandate

The transcript discusses the Federal Reserve's dual mandate of full employment and price stability, referencing Oscar Wilde's quote on tragedies. It highlights the Fed's challenge in balancing domestic goals with global economic impacts, questioning whether the Fed should act as a central banker to the world. The discussion points out the Fed's hesitation to raise rates due to global volatility, raising questions about its independence and mandate.

What are the two tragedies mentioned in the context of the Federal Reserve's role?

• Not getting what one wants and getting it

• High inflation and low employment

• Global instability and domestic growth

• Rising interest rates and falling stock markets

What are the two main goals of the Federal Reserve's dual mandate?

• Strong dollar and balanced trade

• Full employment and price stability

• Low unemployment and high interest rates

• High GDP growth and low inflation

Why is the Fed hesitant to raise interest rates despite meeting its dual mandate?

• Due to global economic conditions

• Because of domestic political pressure

• To avoid increasing unemployment

• To maintain a strong dollar

What was the market's reaction to the Fed's rate cycle plans in early 2023?

• Stable growth

• Increased volatility

• Rising employment

• Decreased inflation

What question does the Fed's global role raise about its nature?

• Should it focus solely on the US economy?

• Does it prioritize inflation over employment?

• Is it an independent domestic body?

• Is it responsible for global trade balance?