Misunderstandings about Government Debt and Resilience of the Economy

In this chapter, the speakers discuss the resilience of the economy and how people often misunderstand the government's debt and its effects on the private sector. They question whether the Fed has a greater chance of overshooting their target interest rate and if Powell might panic when he realizes his ability to affect the economy is limited. They suggest that interest rates may need to be kept higher for a longer time to have a significant impact on the economy, but even with historic rises, interest rates will not be high relative to income in the next six months to a year.