Lael Brainard's 'New Normal' as a Fed Blueprint

The transcript discusses Governor Brainard's dissenting message to the FOMC, highlighting her concerns about raising rates too quickly. It explores the division within the Fed, with some members advocating for rate hikes while others, like Brainard, caution against it due to low inflation and employment considerations. The impact of quantitative easing (QE) in Europe and Japan is also discussed, along with potential policy changes and their effects on long-term rates. The conversation concludes with a discussion on future economic outlooks, inflation, and real rates of return on bonds.

What was the main message of Governor Brainard's speech?

• To agree with the hawks in the Fed

• To announce new monetary policies

• To express dissent against quick rate hikes

• To support immediate rate hikes

What is the main division within the Federal Reserve regarding interest rates?

• Whether to increase or decrease rates

• Whether to maintain or eliminate QE

• Whether to raise rates quickly or cautiously

• Whether to focus on employment or inflation

What does Brainard suggest about full employment in her speech?

• It is higher than 5%

• It should not influence monetary policy

• It is irrelevant to rate decisions

• It is closer to 4% than 5%

How does the market react to signs of ending QE, according to the discussion?

• It becomes volatile

• It improves significantly

• It stabilizes

• It shows no reaction

What historical context is provided about real rates of return on bonds?

• They are irrelevant to current policy

• They have been negative 4% historically

• They have always been positive

• They are expected to rise sharply