Answers audiences questions
He adds:
- still sees a link between inflation, economic strength
- US inflation expectations are far more anchored than 25 years ago
- the natural rate of unemployment may be around 4%
- standard inflation targeting approach may anchor inflation expectations too low
- risks of lower for longer rates includes asset bubbles, excessive credit
- It would be worrisome if we are seeing a persistent decline in inflation expectations
- he wants monetary policy to focus on the macroeconomy and prudential regulation to focus on financial system
- there might be structural factors causing a decline in inflation expectations
- we have an economy growing above trend