There are limits to monetary policy.
Sentiment: NEGATIVE
Our ability to predict how the federal funds rate will evolve over time is quite limited because monetary policy will need to respond to whatever disturbances may buffet the economy.
I know the Federal Reserve Bank can continue to print more and more money... but city and state governments cannot.
Monetary policy itself cannot sensibly be directed at reducing imbalances.
The Federal Reserve's monetary policy objective is to foster maximum employment and price stability. In this regard, a key challenge is to assess just how far the economy now stands from the attainment of its maximum employment goal.
Monetary policy causes booms and busts.
We need to keep in mind the well-established fact that the full effects of monetary policy are felt only after long lags. This means that policy makers cannot wait until they have achieved their objectives to begin adjusting policy.
Monetary policy is like juggling six balls... it is not 'interest rate up, interest rate down.' There is the exchange rate, there are long term yields, there are short term yields, there is credit growth.
Limits should be placed on how big big banks can become.
There is a limit to how much the United States Treasury can borrow.
The Federal Reserve has an official commitment to two different policies. One is to prevent inflation from getting too high. The second is to maintain high employment... the European Central Bank has only the first. It has no commitment to keep employment up.