Fed’s Williams proposes new tools to deal with future crisis
Structural factors beyond central banks’ control keep natural rate of interest lower
The global economy has structurally changed, pushing interest lower, which may force central banks to resort to new tools to combat the next recession, said John Williams, the president of the Federal Reserve Bank of San Francisco, in a speech on November 16.
“The global economy and the policy challenges that we face will be defined by slow trend growth, a very low natural rate of interest, and the lower bound on interest rates,” said Williams.
Lower levels of economic expansion due to weaker
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