Given the very low level of rates over this period, it is not clear to me that a slightly more negative term premium would have produced materially different real economy results. Third, the authors’ proposals seem to me to be fraught with risk for the Federal Reserve. I believe that the existing institutional arrangements have served the public well.
This means that monetary policy seeks to ward off fluctuations in the overall price level, ie inflation and deflation. The objective of price stability invariably concerns the general level of prices for goods and services over the medium term.