Monetary Policy Forum Looks Forward, Back

Published on March 09, 2015

The president of the New York Federal Reserve Bank cited reasons to be cautious on how soon or how quickly to raise interest rates, as he addressed the 2015 US Monetary Policy Forum, held in New York by Chicago Booth. Sponsored by Booth’s Initiative on Global Markets, ,the annual conference brings together academics, market economists, and policy makers.

“I believe that the risks of lifting the federal funds rate off of the zero lower bound a bit early are higher than the risks of lifting off a bit late,” said New York Fed Chief William Dudley. “This argues for a more inertial approach to policy.”

The February 27 conference also addressed the Fed’s bond-buying program, with Vice Chair Stanley Fischer saying quantitative easing was a "critical means" for stimulating the economy with interest rates near zero, though the current high level of securities holdings still may poses a risk.

"Asset purchases over more recent years have provided meaningful stimulus to the economy, and continue to do so," Fischer said. "The Fed’s continuing to hold these securities should apply downward pressure on rates for some time."

Ben S. Bernanke, Fed chair from February 2006 through January 2014, delivered the conference keynote speech.

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