Fed bank regulation super-wonk Daniel Tarullo rarely shares his opinion on the economy or interest rates but he weighed in on the weekend:
- Fed sees more downside risks than upside risks for global growth
- We have to think about downside risks when setting monetary policy
- Aggregate demand problem is not unrelated to income distribution
- Monetary policy is not on a pre-set course, cites downside risks
It’s a rare chance to see where he stands and, importantly, it sounds like he’s as dovish as Yellen. With Fisher and Plosser retiring next year, very little appetite to prematurely hike rates and Europe looking like it’s headed to trouble, it might be time to start putting together a game plan for if the Fed doesn’t hike at all next year.
Tarullo “Rates will forever stay low”