Fed Will Probably Pause on Monetary Tightening: Woods

The transcript discusses the impact of recent rate hikes on the economy, highlighting the disconnect between tighter monetary policy and economic reaction. It examines the role of Silicon Valley Bank as a catalyst in reducing monetary lag and the potential for a Fed pause due to liquidity risks. The discussion also covers regulatory responses and the tightening of credit conditions, emphasizing the need for depositor confidence and the likelihood of economic deceleration.

What does the term 'monetary lag' refer to in the context of interest rates and the economy?

In what ways might the recent banking crisis influence the Federal Reserve's monetary policy decisions?