Clarida talks about the Fed's policy framework
- Fed is launching a broad review of policy framework
- Will weigh changes to inflation-targeting framework
- Will consider new tools to ease policy if needed
- Will review tools that were rejected before, like capping Treasury yields
- Also reviewing ways to improve communication
Capping yields would be something like the BOJ's yield curve control. I think the Fed can send some solid long-term signals with this and that would help in a future downturn but this isn't something to move markets in the short term.
