Especially in a low interest rate environment, the perception that returns on equity should be double-digit is misguided. And setting targeted returns at such  Page 4 of 9  high levels may trigger banks to take on far too much risk and create new vulnerabilities for the future. It may take some time for investors to adjust their expectations.
If my expectations about economic growth, employment, and inflation over the coming months are borne out, however, and especially if they come in stronger than I expect, then, as noted in the minutes of the last FOMC meeting, it will become important for the FOMC to begin discussing our plans to adjust the pace of asset purchases at upcoming meetings.