The Federal Reserve Holds Interest Rates Steady

~ EconEye Admin

The Federal Reserve left interest rates unchanged Wednesday, but most Fed policymakers are considering an additional rate hike before yearend. Fed chairman Jerome Powell told reporters that as the interest rate moves to the level appropriate to move inflation down to 2%, the risks become more two-sided.—npr.org

Answer the following questions to check your understanding of the story.

What goal do Fed policy makers expect to achieve if they make an additional interest rate hike before yearend?

Fed policy makers expect ____________.

What is the short-run risk that the economy faces by raising the interest rate to the “level appropriate to move inflation down to 2%”?

The short-run risk is the trade-off between ____________.

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