Words matter. These are the best Jerome Powell Quotes, and they’re great for sharing with your friends.
If the public understands the central bank’s views on the economy and monetary policy, then households and businesses will take those views into account in making their spending and investment plans; policy will be more effective as a result.
The Federal Reserve is not charged with designing or evaluating proposals for housing finance reform. But we are responsible for regulating and supervising banking institutions to ensure their safety and soundness, and more broadly for the stability of the financial system.
Alignment of business strategy and risk appetite should minimize the firm’s exposure to large and unexpected losses. In addition, the firm’s risk management capabilities need to be commensurate with the risks it expects to take.
One factor that favors easier adjustment in EMEs is that U.S. monetary policy normalization has been and should continue to be gradual, as long as the U.S. economy evolves roughly as expected.
Risk management systems and controls may discourage or limit certain revenue-generating opportunities. Failure to ensure the independence of these functions from the revenue generators and risk takers has been shown to be dangerous, and this is something for which the board is accountable.
Long-term economic growth depends mainly on nonmonetary factors such as population growth and workforce participation, the skills and aptitudes of our workforce, the tools at their disposal, and the pace of technological advance. Fiscal and regulatory policies can have important effects on these factors.
The only way to ensure that inflation expectations remain safely anchored near the FOMC’s target is to keep inflation close to that target on a consistent basis.
The financial crisis and the Great Recession left firms with excess capacity, reducing incentives to invest. If businesses expect slower growth to continue, that will also hold down investment.
Against this backdrop of technological change and heightened expectations, it is worth remembering our broad public policy objectives, which are driven by the fundamental importance of the payments system in our society.
Increased fragmentation of production across international borders – a natural outgrowth of the gains from specialization – meant more trade for any given value of final production, thus adding to the major expansion in gross trade flows in the 1990s and 2000s.
My colleagues on the Board of Governors and I understand the value of having a diverse financial system that includes a large and vibrant contingent of community banks.
The success of monetary policy should be judged by the economy’s performance against our statutory mandates of price stability and maximum employment.
A digital currency issued by a central bank would be a global target for cyber attacks, cyber counterfeiting, and cyber theft.
The financial crisis revealed important weaknesses in many areas of our financial system.
No single housing finance institution should be too big to fail.
In normal times, at the beginning of each month, the federal government makes a cash advance to the Social Security Trust Fund called the ‘normalized tax transfer,’ in an amount equal to the estimated payroll taxes for the coming month.
I am unable to think of any critical, complex human activity that could be safely reduced to a simple summary equation.
By purchasing and holding large amounts of Treasury securities and MBS, we put additional downward pressure on term premiums and so on long-term rates.
There is clear empirical evidence that the response of EME financial markets to different shocks, including changes in U.S. interest rates, depends importantly on the state of economic fundamentals in the EMEs themselves.
We do take seriously our obligation to assess whether our reforms are achieving their desired effects without imposing unnecessary burden.
The main long-run contribution monetary policy can make is to provide a stable macroeconomic and financial environment.
Over time, low rates can put pressure on the business models of financial institutions.
There is no risk-free path for monetary policy.
The Federal Reserve places great importance on our relations with the Bundesbank. Few such relationships have been as important, over the decades, in promoting financial stability and prosperity around the world.
We understand that America’s prosperity is bound up with the prosperity of other nations, including emerging market nations.
Below-target inflation increases the real value of debts owed by households and businesses and reduces the ability of central banks to respond to downturns.
More regulation is not the best answer to every problem.
Community banks are a crucial part of our economy and the fabric of our society.
The longer workers are unemployed, the greater the likelihood that their skills will erode and workers will lose attachment to the labor force, permanently damaging the economy’s dynamism and potential output.
Higher asset prices increase wealth and, with a lag, induce higher spending.
The Fed’s organization reflects a long-standing desire in American history to ensure that power over our nation’s monetary policy and financial system is not concentrated in a few hands, whether in Washington or in high finance or in any single group or constituency.
The overwhelming majority of new mortgages are issued with government backing in a highly concentrated securitization market. That leaves us with both potential taxpayer liability and systemic risk.
The financial crisis involved significant failures in the functioning, regulation, and supervision of OTC derivatives markets.
We need a system that provides mortgage credit in good times and bad to a broad range of creditworthy borrowers.
Central banking often comes across as obscure and complicated, and we try to help the public understand what we do.
The banking industry has traditionally been characterized by physical branches, privileged access to financial data, and distinct expertise in analyzing such data.
An increase in the debt ceiling should be accompanied by fundamental policy reforms, substantial budget savings, and a strong enforcement mechanism to tie the hands of any future Congress.
We need a national focus on increasing the sustainable growth rate of our economy.
Mobile devices, high-speed data communication, and online commerce are creating expectations that convenient, secure, real-time payment and banking capabilities should be available whenever and wherever they are needed.
The Federal Reserve is committed to fulfilling our statutory mandate of stable prices and maximum employment.
The revenue stream for Social Security benefits comes from payroll taxes, which are credited to the Social Security Trust Fund – accounting for the program’s finances separately from the rest of the budget.
The United States has never prioritized or failed to pay any obligation when due during a debt limit impasse. Despite the institutional risks and the lack of clear legal authority, we assume that Treasury will attempt to prioritize payments in a last-ditch effort to avoid default.
In a world of global trade and integrated capital markets, it is natural for economic and financial shocks and policy actions to be transmitted across borders.
Congress created Fannie Mae in 1938 and Freddie Mac in 1970. For many years, these institutions prudently pursued their core mission of enhancing the availability of credit for housing.
Higher capital requirements increase bank costs, and at least some of those costs will be passed along to bank customers and shareholders. But in the longer term, stronger prudential requirements for large banking firms will produce more sustainable credit availability and economic growth.
As long as global financial conditions normalize in an orderly fashion, EMEs should have sufficient time to adjust.
As with so many sectors of the economy, technology is transforming the retail banking sector.
The TMPG is the place where market participants recognize and address their responsibilities to each other.
Loss-absorbing capacity among banks is substantially higher as a result of both regulatory requirements and stress testing exercises.
It is quite plausible that the process of increased fragmentation of production across borders is subject to ‘diminishing returns’ and has its natural limits.
Over the longer run, advanced economy policy actions that strengthen global growth and global trade will benefit the EMEs as well.
Our discussions of the economy may sometimes ring in the ears of the public with more certainty than is appropriate.
The Congress has tasked the Federal Reserve with achieving stable prices and maximum employment – the dual mandate.
All economic forecasts are subject to considerable uncertainty. There is always a wide range of plausible outcomes for important economic variables, including the federal funds rate.
I support adjustments designed to enhance the efficiency and effectiveness of regulation without sacrificing safety and soundness or undermining macroprudential goals.
We live in a world defined by the rapid pace of technological change.
The GSEs became powerful advocates for their own bottom lines, providing substantial financial support for political candidates who supported the GSE agenda.
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