Overall, the Federal Reserve has many effective tools to tighten monetary policy when the economic outlook requires us to do so. As my colleagues and I have stated, however, economic conditions are not likely to warrant tighter monetary policy for an extended period. We will calibrate the timing and pace of any future tightening, together with the mix of tools to best foster our dual objectives of maximum employment and price stability.
Wednesday, July 22, 2009
Fed Chairman Bernanke has an article on the WSJ on how he expects the Fed to take us out of the liquidity swamp we find ourselves in right now (HT Mankiw). Here's his prognostic: