Cleveland Fed President Loretta Mester said, “I would like to see financial stability considerations explicitly incorporated into the monetary policy framework, with an acknowledgment that nonconventional monetary policy has the potential to increase the risks to financial stability.”
“Monetary policymakers need to be clear-eyed that the actions they take to achieve monetary policy goals, while most often complementary to fostering financial stability, can at times contribute to financial stability risks that could jeopardize the achievement of monetary policy goals over time,” she warned.
Nevertheless, she added, “I don’t think we’re at that level where we’re facing that tradeoff between, you know, macro policy tools needing to be dialed back because of financial stability risks.”
