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I continue to think many of the factors holding down inflation are transitory... We want to be careful not to jump to a premature conclusion about what's in store for the U.S. economy.

But clearly an economy that's growing and expanding like this one - and it certainly is doing that with high GDP output, employment numbers strong, capacity utilization strong - that's an environment in which the Fed needs to continually be alert to early signs of inflation.

The Fed has the ability to put money out, it's got the ability to take money back in, and if they don't do that, we will have hyperinflation worse than we had in 1980 and 1981.

I have never believed that central banks should have rigid inflation targeting. That is not a good thing to stabilize. There is nothing in economic theory to back this.

The Fed should make a clear commitment to stable money to reduce the swings in interest rates and inflation. Instead, it champions and flaunts unstable money. This encourages momentum trading and the growth of derivatives. Meanwhile, layers of financial regulation make Washington bigger and more powerful but don't fix the underlying problems.

Avoiding inflation is not an absolute imperative but rather is one of a number of conflicting goals that we must pursue and that we may often have to compromise.

By putting downward pressure on interest rates, the Fed is trying to make financial conditions more accommodative - supporting asset values and lower borrowing costs for households and businesses and thus encouraging the spending that spurs job creation and a stronger recovery.

We have to keep our eye on inflation, but so far inflation remains reasonably in check on the global stage.

Our focus is on ensuring America has the strongest economy in the world for the next 100 years and to do that, we need to get to the role of the Federal Reserve and we need to get it right.