I, personally, learned next to nothing about the monetary policy stance of the nominees to the Federal Reserve Board of Governors at today’s Senate hearing. Janet Yellen, Peter Diamond, and Sarah Bloom-Raskin all seemingly showed up to the wrong hearing! The hearing that I saw was almost solely about financial regulation.
This is what I tweeted to Chris Dodd:
@chrisdodd PLEASE ask them: “Do you believe that the Fed can stimulate aggregate demand at the zero lower bound?” #frbhearing
Here is the closest I have to go on from Janet Yellen:
July 1 (Bloomberg) — Federal Reserve Bank of San Francisco President Janet Yellen said the prospect that policy makers will leave the benchmark U.S. interest rate near zero for the next several years is “not outside the realm of possibility.”
“We have a very serious recession, we have a 9.4 percent unemployment rate,” and inflation possibly falling further below the Fed’s preferred level, she told reporters yesterday after a speech in San Francisco. Given the recession’s severity, “we should want to do more. If we were not at zero, we would be lowering the funds rate.”
These are not very inspiring statements.
[H/T to an old Scott Sumner post]
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Thursday ~ July 15th, 2010 at 1:09 pm
Rebecca Burlingame
Perhaps what the Fed hasn’t noticed, is that even those with little knowedge of the economy usually have more confidence about taking out a loan when the interest rate is a long way from zero.
Saturday ~ July 17th, 2010 at 10:40 am
Bob Roddis
Since the Austrian School has proven definitively that it is central bank money dilution and artificially low rates themselves that are the cause of the boom and bust cycle by making economic calculation impossible and inducing an unsustainable capital, price and investment structure, we can look forward to many more years of Keynesian-induced economic disaster.
If there is justice in the world, the populace will understand who did this to them.