Peterson Inst.'s Posen Sees Rising Risk of Recession

The video discusses the challenges faced by the Federal Reserve in managing inflation without causing a recession. It highlights the historical difficulty of such actions and the potential for policy mistakes. The possibility of a growth recession, where growth slows without significant unemployment, is considered. Current financial conditions are better than in previous cycles, which may help keep inflation expectations anchored. The video concludes with a discussion on the potential extent of rate hikes needed to control inflation.

What is one of the main challenges the Federal Reserve faces when trying to control inflation?

• Balancing inflation control with avoiding a recession

• Increasing exports

• Increasing unemployment rates

• Reducing government spending

What is a 'growth recession' as mentioned in the video?

• A period of negative growth and high unemployment

• A slowdown in growth without significant unemployment or negative growth

• A rapid increase in economic growth

• A period of stable growth with low inflation

What is the likelihood of an actual recession according to the speaker?

• Less than 10%

• Almost certain

• About 50%

• More than 33%

How are the financial conditions of businesses and households described in the video?

• Worse than previous cycles

• Similar to previous cycles

• Better than previous cycles

• Unchanged from previous cycles

What is the expected range of rate hikes needed to control inflation according to the speaker?

• 300 basis points

• 400 basis points

• 200 basis points

• 100 basis points