Federal Reserve
Who is the chairman of the Federal Reserve?
Jerome Powell (JPow)
What is a bear market?
A period where stock prices have fallen at least 20% from their recent highs. (TLDR; market downturn)
Why did defense, bitcoin, and Tesla go up recently?
Trump Trade
What concept explains that money today is worth more than money in the future?
Time Value of Money
Which 'force' refers to new companies that can disrupt the current players?
Threat of New Entrants
What are the three policy tools of the Fed with explanations (get points if you name two of them)?
Open Market Operations, Discount Rate, Reserve Requirements
How does a recession generally affect inflation and unemployment?
UE up, inflation down
Who did Trump choose for the Department of Government Efficiency?
Elon Musk and Vivek Ramaswamy
What are the two types of expenses/costs?
Variable and Fixed
What is a value-chain?
The series of steps that go into creating a good/service
What is the Federal Reserve's preferred measure of inflation and why?
PCE (Personal Consumption Expenditure)
What is the difference between nominal and real rates?
Real rates are inflation-adjusted, nominal is just the raw rate
Which stock is on the verge of getting delisted, and why?
Supermicro!! (SMCI)
The limit of money insured by the FDIC?
250,000 (SVB!)
What are some factors that create barriers to entry?
High capital requirements, strong brand loyalty
When did the Fed begin their rate hiking cycle?
Q1 2022 (H1 2022 works too)
What does GDP stand for and how is it calculated?
Gross Domestic Product- C+I+G+NX
Why does the dollar go up when the Federal Reserve hikes rates?
Investing in the US is now more attractive as there is a higher rate of return
What is R*, and how is it 'calculated'?
Neutral Rate of Interest
What is vertical integration?
When company controls multiple stages of distribution or production
What is name of the mechanic by which the fed has shed over 2 trillion off its balance sheet since April 2022 (more specific than QT)?
Balance-sheet runoff (this means letting securities mature without reinvestment)
What is a yield curve inversion, and what does it 'generally' indicate?
When short-term rates are higher than long-term rates. People sell short-term bonds and buy long-term bonds, pushing short-term yields up and long-term down.
What are the expectations of Trump's economy?
Cut taxes, add to deficit and bolster growth, high tariffs
What is the Phillips Curve supposed to explain?
It states that inflation and unemployment have a stable, inverse relationship
What is the network effect, and give me an example of it in the real world?
When a product becomes more valuable as people use it. Ex: Facebook, Instagram, etc