.zero bound.

.in light of the FOMC's meeting today, the current fed funds target of 1% & the prospect the Fed will cut rates to 0.05%, I thought I would post a blurb from a 2001 Bernanke speech on deflation:

"Sustained deflation can be highly destructive to a modern economy and should be strongly resisted....Nevertheless, I hope to have persuaded you that the Federal Reserve and other economic policymakers would be far from helpless in the face of deflation, even should the federal funds rate hit its zero bound."


heidi said...

the pine-eating elephant... awesome :-)

ArtSparker said...

I like a manly man who feels far from helpless.

Save me, Ben!

dolcechic said...

I don't know what to make of all this. One aspect, I'm glad my interest rates on my credit cards continue to go down, but it also bums me out that the same interest rate that goes down on my card payments, also goes down on my savings acct. I guess I can't win!

milly (elephants&redwoods) said...

it will get better in time!! watch out for inflation in 2010.