Answers questions after speech
New Fed Vice Chair is now answering questions after his speech at the Peterson Institute for International Economics Luncheon, in Washington DC
- No alarms going off now from labor market
- Economy now operating at price stability
- forward guidance has been, can be effective tool but likely depends on how far the central bank is from its goals
- economic fundamentals are very very solid
- changes in financial conditions relevant to outlook
- changes in asset markets and other financial conditions, on a sustained basis, need to be taken into account in monetary policy
- Macro–prudential important, very country specific
- Still a lot to learn about macro– prudential policy
- early rounds of QE effective and justified
- benefits of QE diminished over time, costs went up
- would not rule out quantitative easing out of the Fed toolkit
- uncomfortable with that getting too deeply into influencing asset prices, feels later rounds of QE were less affected with higher potential costs
- studies show Fed crisis swap lines were effective
- Fed independence is important to achieve its mandates
