Macro cramming

What are the "good" ranges for GDP, inflation, and unemployment?

• GDP Growth: 2–4%

• Inflation: 1–2% (2% ideal)

• Unemployment: 4–6%

What do current numbers say about the economy?

• GDP: Negative growth due to high imports ahead of tariffs.

• Inflation: Slightly above normal, but cooling.

• Unemployment: Low, showing a strong job market.

How are tariffs affecting the economy?

• Tariff effects not fully seen yet in inflation.

• Expected to reduce imports (may boost GDP next quarter).

• Uncertainty: Could cause higher inflation and slower growth later.

What is the overall economic outlook right now?

• Economy is strong, but uncertain due to tariffs.

• If next quarter’s GDP is negative, major concern arises.

• “Wait and see” stance for upcoming months.

Who controls the Fed Funds Rate and why is it important?

• Controlled by Federal Reserve.

• Important bc it’s adjusted to manage spending, inflation, and money supply.

What actions has the Fed taken with interest rates recently?

• Past few years: Raised rates to fight high inflation.

• Mid-2024: Paused rate hikes.

• Late 2024: Started lowering rates as inflation cooled near 2%.

What is the Fed’s current stance?

• Uncertain until inflation hits 2% target.

• Tariffs add uncertainty.

• Expect active changes in interest rates through 2025.

current rates

gdp: -.5%

inflation: 2.7%

unemployment: 4.1%

target fed funds rate: 4.25%-4.50% range