Former Federal Reserve Board Governor Randall Kroszner spoke to CNBC this morning about the state of the U.S. economy.
- 1:05 When Bernanke started speaking in August, inflation expectations were dropping, people were concerned about a Japan style situation. He got out ahead of the issue by buying a “little bit of insurance” against the tail risk situation.
- 2:08 “Open mouth operations” instead of open market operations, so much is about expectations and expectation management. The Fed had to follow through on what it said. We need to created 125,000 jobs a month to keep jobs flat, twice as much to grow.
- 3:20 “Partly cloudy with a chance of thunderstorms,” for U.S. economy. Fed needs to put up an umbrella.
- 4:10 The ECB is now doing what the Fed had to do just a few years ago. It is a very delicate time, as European policy makers have failed to be clear as to what their doing.
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