Five features of the new framework and September FOMC statement define how the Committee will seek to achieve its price-stability mandate over time: 1.
At the same time, financial stability need not seek to eliminate all risks. We need to learn, but not overlearn, the lessons of the crisis. I believe there should be a high bar for “leaning against the credit cycle” in the absence of credible threats to the core or the reemergence of run-prone funding structures.