Moody’s Analytics’s Cochrane Sees Fed Cutting by 25BPS in September and December

The video discusses the current economic uncertainties, particularly focusing on the impact of new tariffs from the Trump administration. It highlights how these uncertainties have affected Federal Reserve policy expectations, with potential interest rate cuts anticipated. The risks to the US economy, including weakened business investment and manufacturing activity, are analyzed, suggesting a higher probability of recession in the coming year.

What was the initial expectation for the economy by May and June?

• Rapid growth

• A significant downturn

• Complete recovery

• Stability and leveling off

How did the new tariffs from the Trump administration affect economic uncertainty?

• They increased uncertainty

• They stabilized the economy

• They had no impact

• They reduced uncertainty

What was the Federal Reserve's initial policy expectation before the new tariffs?

• To maintain current rates

• To eliminate interest rates

• To increase interest rates

• To cut rates by 50 basis points

What is a potential consequence of increased tariffs on manufacturing?

• Higher business confidence

• Stable production levels

• Slower manufacturing activity

• Increased hiring

What change in Fed policy is being considered due to the economic risks?

• Eliminating interest rates

• Maintaining current rates

• Increasing interest rates

• Cutting interest rates