INSUBCONTINENT EXCLUSIVE:
fight the next recession.
While the Fed has limited room to cut short-term interest rates because they're already so low, Bernanke argued
that quantitative easing and forward guidance could provide enough extra punch to combat a future economic contraction
out to two years and funding for lending programs
policy makers have come very close to doing in their public remarks.
No matter what approach the Fed adopts to fight future recessions,
longer-term yields will probably spend extended periods of time at zero or below, according to Bernanke, now a Distinguished Fellow at the
Brookings Institution in Washington.
That may pose risks to financial stability
forward guidance assumes that the Fed adopts a policy of promising not to raise rates from zero until inflation reaches 2 per cent
While policy makers are considering changes in their approach to achieving their inflation goal, it's not clear they would go as far as