4min chapter

Forward Guidance cover image

Nick Timiraos: The Fed Doesn't Want Bank Failures In The News

Forward Guidance

CHAPTER

The Tradeoff Between Monetary Policy, Monetary Stability and the Financial Tools

Powell: At a certain point, the banking crush could become important enough to say, all right, don't keep raising interest rates. Powell also said, he said, it does complicate. We have a broad understanding of monetary policy. Credit tightening is a different thing. He's basically saying, we think we know pretty well how to model our interest rate actions. But when you kick off something in the banking environment now that has its own dynamics behind it, it's a different thing."

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