I then point out that low real interest rates are often associated with financial market phenomena that are seen as signifying instability. It follows that, for many years to come, the FOMC will only be able to achieve its congressionally mandated objectives by following policies that may result in signs of financial market instability.
Finally, I discuss how the FOMC should take those signs of instability into account when formulating monetary policy. Before proceeding I need to stress that my remarks today reflect only my views and not necessarily those of any other FOMC participant. Low real interest rates Economists generally distinguish between nominal and real interest rates.