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