The policy interest rate is only used to influence these two objectives. But that does not mean that policy makers can be indifferent to the level and rate of change of the exchange rate. The exchange rate is of crucial importance for low income economies for at least three reasons.
In addition, policymakers inside and outside the Fed may wish at some point to consider additional options to secure a strong and resilient economy. But before I turn to these longer-run issues, I would like to offer a few remarks on the near-term outlook for the U.S. economy and the potential implications for monetary policy.