Current Monetary Policy, the New Fiscal Policy and the Fed’s Balance Sheet: a presentation at Economic Club of Memphis, Memphis, Tenn., March 24, 2017

James Bullard

No 282, Speech from Federal Reserve Bank of St. Louis

Abstract: In an address to the Economic Club of Memphis, St. Louis Fed President James Bullard discussed the current ?regime? of low real GDP growth and low real interest rates on short-term government debt. Given that this regime is unlikely to change dramatically during 2017, he said that the federal funds rate target can remain relatively low and still keep inflation and unemployment near goal values. He also discussed the possible impact of the new fiscal policy on this regime, noting that the Fed can wait to see how fiscal policy develops. Regarding the Fed?s balance sheet, he said that now may be a good time for the Federal Open Market Committee (FOMC) to consider allowing the balance sheet to normalize by ending reinvestment.

Pages: 34 pages
Date: 2017-03-24
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