Bullard Says Fed Is Willing to Use Balance Sheet in Different Ways

The transcript discusses the challenges of monetary policy when interest rates are near zero, including the use of forward guidance and quantitative easing. It explores potential strategies for using the balance sheet differently, such as buying mortgage-backed securities. The speaker emphasizes the importance of public health measures in economic recovery and considers future economic scenarios, including the possibility of reversing rate cuts if growth improves.

What is a significant challenge for monetary policy when interest rates are near the zero lower bound?

• Excessive inflation

• Limited room for rate cuts

• Lack of forward guidance

• Inability to use quantitative easing

Which tool is mentioned as a potential new use for the balance sheet?

• Buying mortgage-backed securities

• Buying government bonds

• Increasing interest rates

• Reducing inflation

What is considered crucial for overcoming a public health crisis?

• Implementing trade barriers

• Reducing government spending

• Public awareness and early treatment

• Increasing interest rates

What economic condition could lead to reversing rate cuts?

• Faster economic growth

• Increased unemployment

• Improved public health

• Decreasing inflation

During which years did the economy experience growth rates over 3%?

• 2015 and 2016

• 2017 and 2018

• 2021 and 2022

• 2019 and 2020