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