Activity: How Federal Reserve Policies Are Impacting Personal Finances (6/15/22 Fed Meeting)
What made the Federal Reserve meeting on June 15th so momentous?
How much did the Fed raise interest rates and why? What is causing consumers so much pain? Is there a recession around the corner? Get answers to these questions and more in this activity.
Approximately every six weeks, the Federal Open Market Committee (FOMC) of the Federal Reserve meets. One of the policies at their disposal is the setting of short-term interest rates. Given the current economic conditions, the gravity of these meetings have increased significantly. The Fed Chair Jerome Powell meets with the press at the conclusion of the FOMC meetings to answer questions. Thanks to Ren for his help in creating an activity that uses Chair Powell's June 15th press conference as a learning opportunity.
In this activity, students will watch 4 short video segments of Chair Powell's press conference (1-4 minutes in duration) and answer questions. It's a great way for students to see economic concepts play out in real-life while also seeing links between the economy and personal finances. Just click on the deck below and enjoy!
Did you know that NGPF has an Economics Directory? It categorizes more than 150 NGPF activities into 11 Economics topics. Check it out here.
Here's the link to the full video: https://www.youtube.com/watch?v=jIK9UogQBjE
- 0:00~9:19 Chair Powell’s Opening Statement
- 9:19~11:36 Reflection on the last press conference’s comments
- 11:36~15:05 Process of deciding to raise the interest rate by 0.75%
- 15:05~18:40 How high does the interest rate needs to be?
- 18:40~21:35 Managing the public’s expectations and maintaining the Fed’s credibility
- 21:35~24:07 Importance of the Fed providing clear guidance
- 24:07~28:55 Potential trade-off of higher unemployment to lower inflation
- 28:55~31:31 Consequences of higher unemployment from establishing price stability
- 31:31~35:16 Omitted sentence regarding the impact of monetary policy alone
- 35:16~37:17 Changes in consumer consumption and spending
- 37:17~38:52 Referencing and managing core inflation and headline inflation
- 38:52~39:51 The available data when the SEP was submitted
- 39:51~42:34 Is inflation data enough to measure the effectiveness of the Fed’s policies?
- 42:34~44:12 Public’s sentiment on inflation
- 44:12~45:58 Inflation spreading across different sectors of the economy
- 45:58~47:36 Potential for a “soft landing” of lower inflation
- 47:36~49:21 The risk of a recession from higher rate hikes
- 49:21~53:36 Reviewing last year’s monetary policy
- 53:36~56:21 Housing prices and the differences between 2008 and today