Third, the Committee stated that it “anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run.”6 Committee members have differing thoughts on why that may be the case.
In our case, aggregates for credit, household sector debt servicing burdens, risk spreads and so on are commonly used for both types of work. That is because the ranking question of late has been whether the extent of additional household leverage amounts to a risk to financial stability.