– Janet Yellen Falters During Speech, Receives Medical Attention, All-Clear Given:
“Yellen faltered at end of her speech. Last page was agonizing. I don’t think she felt well but she seemed better when she left the stage.”
“…the federal funds rate and other nominal interest rates cannot go much below zero, since holding cash is always an alternative to investing in securities. … the lowest the FOMC can feasibly push the real federal funds rate is essentially the negative value of the inflation rate. As a result, the Federal Reserve has less room to ease monetary policy when inflation is very low. This limitation is a potentially serious problem because severe downturns such as the Great Recession may require pushing real interest rates far below zero for an extended period to restore full employment at a satisfactory pace.“