Morgan Stanley's Kushma Questions Central Bank Credibility on Inflation

The video discusses the Federal Reserve's consideration of raising the inflation target, despite challenges in meeting the current target. Mohamed Al Arian questions the feasibility and risks of this move. The discussion includes examples from Japan and the Eurozone, where central banks struggle to meet inflation targets despite various measures. The video concludes with a discussion on the credibility of central banks in managing inflation.

What is the main topic discussed by Mohamed Al Arian in the video?

• The role of fiscal policy in economic growth

• The possibility of the Fed raising its inflation target

• The effects of unemployment on inflation

• The impact of interest rates on inflation

Why is it questioned whether the Fed should raise its inflation target?

• Because the Fed has consistently met its current target

• Because the current target is too high

• Because inflation is not a concern anymore

• Because the Fed struggles to meet its current target

Which central banks are mentioned as having difficulty meeting their inflation targets?

• Bank of England and Federal Reserve

• Swiss National Bank and Bank of Canada

• Bank of Japan and European Central Bank

• Reserve Bank of India and People's Bank of China

What measures have the Bank of Japan and ECB taken to meet their inflation targets?

• Increased taxes and reduced spending

• Decreased money supply and increased tariffs

• Raised interest rates and cut government bonds

• Implemented negative rates and expanded balance sheets

What is the underlying question about central banks' credibility?

• Whether they can lower inflation effectively

• Whether they can maintain stable exchange rates

• Whether they can reduce unemployment rates

• Whether they can increase inflation from current levels