Fed’s Mester: Low-Interest Rates Are Helping US Economy

President of the Federal Reserve Bank of Cleveland, Loretta Mester, said on Wednesday that the Fed’s new approach should help the economy against the COVID-19 crisis.

“While monetary policy that leads to a stable macroeconomy encourages financial stability, it is also possible that in an environment with low neutral rates, a persistently accommodative monetary policy could, in some cases, increase the vulnerabilities of the financial system.”

“How best to approach the nexus between monetary policy and financial stability in a low-interest-rate world deserves more consideration.”