Powell Says Some Economic Headwinds Are Now Tailwinds

The transcript discusses the economic outlook, highlighting growth in household incomes, consumer spending, and fiscal policy's stimulative role. It anticipates inflation to stabilize around 2% and wages to rise. The FOMC has adjusted monetary policy by raising interest rates and normalizing the balance sheet to sustain a strong labor market and achieve inflation targets. Despite past economic headwinds turning into tailwinds, inflation remains below the 2% objective. The FOMC plans further gradual rate increases, balancing economic growth and inflation control, with decisions informed by incoming data.

What is expected to happen to inflation over the medium term according to the committee?

• It will remain unpredictable.

• It will stabilize around 2%.

• It will decrease significantly.

• It will exceed 3%.

What was one of the actions taken by the FOMC in December regarding the federal funds rate?

• They eliminated it entirely.

• They decreased it by half a percentage point.

• They kept it unchanged.

• They raised it by a quarter percentage point.

What program did the FOMC initiate in October to manage securities holdings?

• A quantitative easing program

• A fiscal stimulus program

• A balance sheet normalization program

• A securities expansion program

What has become more stimulative, contributing to the economic outlook?

• Monetary policy

• Fiscal policy

• Trade policy

• Environmental policy

What is the committee's view on further gradual increases in the federal funds rate?

• They will lead to economic instability.

• They will best promote attainment of economic objectives.

• They are unnecessary at this time.

• They will hinder economic growth.