Economist Maki Says Fed Can Raise Rates and Unwind Balance Sheet

The transcript discusses an op-ed by Stan Druckenmiller and Kevin Wash, urging the Fed to be cautious with its policies. It explores the Fed's potential to raise interest rates and unwind its balance sheet simultaneously, despite concerns about financial conditions weakening. The discussion highlights the importance of the Fed's credibility and its shift towards data dependence. Market predictions suggest more than one rate hike in 2019, with a focus on understanding the Fed's intentions.

What is the main concern expressed in the op-ed by Stan Druckenmiller and Kevin Wash?

• The Fed's simultaneous actions of winding down the balance sheet and raising rates.

• The Fed's lack of communication with the public.

• The Fed's focus on international markets.

• The Fed's decision to lower interest rates.

How are financial conditions in the US changing according to the discussion?

• They are weakening in tandem with rising interest rates.

• They are strengthening due to increased consumer spending.

• They are remaining stable despite economic changes.

• They are improving significantly.

What approach is the Fed shifting towards, as mentioned in the discussion?

• A more data-dependent approach.

• A focus on international economic conditions.

• A more aggressive rate hike strategy.

• A strict adherence to previous plans.

What does the market expect regarding the Fed's interest rate hikes in 2019?

• Three rate hikes.

• No rate hikes.

• One rate hike.

• Two rate hikes.

What is the potential misunderstanding between the market and the Fed's communications?

• The market has overbought into the Fed's statements.

• The market believes the Fed will lower rates.

• The market thinks the Fed will stop all policy changes.

• The market expects more rate hikes than the Fed plans.