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Fed Chair Powell and the New Rules of Monetary Policy

Mercatus Policy Download

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Is the Fed Going to Have to Deal With a Low GDP Target?

Jay Parini: How do you deal with moments like the current one where you're getting a big fiscal stimulus? It's going to push up GDP in the short run, but that is expected to fade out in the longer run. He says interest rates are so low that I think the Fed normally cuts rates 5 percentage points in a recession. Parini: They just don't have room to cut 5 percentage points if we could hit by a recession. So what are you thinking, negative interest rates or?

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