Last week’s decision is closely linked to our monetary policy strategy, which stipulates that the appropriate monetary policy response to a deviation of inflation from the symmetric two per cent target is context-specific and depends on the origin, magnitude and persistence of the deviation.
Council members regularly discuss risks to financial stability and produce an annual report, which reviews potential risks and recommends ways to mitigate them.1 The Federal Reserve’s broad-based monitoring efforts have been essential for promoting a close and well-informed collaboration with other FSOC members. A focus on vulnerabilities Ongoing monitoring of the financial system is vital to the macroprudential approach to regulation.