But it is important to understand that this expansion need not trigger inflation now or in the future, because the Federal Reserve can now pay interest on bank reserves. With all that said, I’ve dissented from the FOMC’s decisions in the past two meetings.
As I mentioned earlier, I believe that the FOMC’s ultimate effectiveness relies critically on its communication and the credibility of that communication. I’ve dissented at the last two meetings because I believe that the Committee’s decisions at those meetings diminish that requisite credibility. I’ll close my remarks today by explaining my thinking on this matter.