El-Erian: No Surprises in Yellen's Speech

The transcript discusses the potential for a September rate increase, noting that market expectations were previously too low. It highlights the influence of international factors on the US yield curve, particularly the impact of German economic data. The conversation shifts to the neutral rate of interest, which is lower than in the past due to various factors, and the need for other government agencies to fulfill their policy roles. Finally, the debate on whether the Fed should raise its inflation target is explored, with concerns about political interference and the limitations of monetary policy as the sole tool.

What is the Federal Reserve's stance on a potential rate increase in September?

• The Fed has ruled out a rate increase.

• The Fed is data-dependent and will decide after the next jobs report.

• The Fed has already increased the rates.

• The Fed is certain about a rate increase.

How do international factors affect the US yield curve?

• They have no effect on the US yield curve.

• They only affect short-term maturities.

• They cause the US yield curve to become steeper.

• They heavily influence long-term maturities.

What is the current state of the neutral rate of interest?

• It is higher than in the past.

• It is not influenced by productivity or investment behavior.

• It is the same as it has always been.

• It is lower than it has been historically.

Why is there a debate about raising the Fed's inflation target?

• The Fed has easily reached its current target.

• A higher target would automatically solve inflation issues.

• Raising the target could lead to political interference.

• The current target is too high.

What is suggested as a solution to the current reliance on monetary policy?

• Reducing government agency involvement.

• Relying solely on the Fed.

• Increasing the inflation target.

• Widening the policy discussion to include other tools.