Further research in the economic literature has highlighted the difference in treatment according to whether the trend is caused by permanent or temporary factors. In a financial world characterized by capital flow volatility, a massive amount of capital may lead to some kind of “Dutch disease,” with unsustainable paths and high real variable volatility.
And so, our effort to create opportunities to enhance our ability to listen has continued, and has become what I expect will be, and certainly should be, a permanent feature of the Federal Reserve's decision-making. It is a simple fact that what the Fed does in Washington has a significant impact on how families and businesses spend, borrow and plan for the future.