Two More Fed Hikes Expected in 2018, Niskanen Center's Smith Says

The transcript discusses the US economic outlook, focusing on potential Federal Reserve rate hikes due to strong economic growth. It addresses concerns about the temporary nature of this growth, considering the impact of tariffs, especially on agriculture. The discussion also touches on the Fed's independence amidst political pressure from the White House. The potential long-term economic effects of ongoing tariffs, such as inflation and stagflation, are considered, with an emphasis on the Fed's ability to manage these challenges using its policy tools.

What is the Federal Reserve considering in response to the strong economic performance in the second quarter?

• Reducing interest rates

• Increasing tariffs

• Decreasing exports

• Implementing two or more rate hikes

Why do some critics believe the economic growth is temporary?

• Owing to a decline in business investments

• Because of temporary export boosts from tariffs

• As a result of increased government spending

• Due to a decrease in consumer spending

How does the White House's stance potentially affect the Federal Reserve's policy decisions?

• It forces the Fed to increase tariffs

• It pressures the Fed to appear independent

• It makes the Fed more likely to lower rates

• It encourages the Fed to boost exports

What are the potential long-term economic effects of ongoing tariffs?

• Deflation followed by economic boom

• Short-term inflation followed by stagflation

• Immediate recession

• Sustained economic growth

What tools does the Federal Reserve have to manage potential stagflation?

• Implementing tax hikes

• Increasing government spending

• Tightening monetary policy to control inflation

• Reducing interest rates to boost demand