Fed's Rosengren (hawk, non-voter in 2018): has concerns we may start to see a reach for yield
- There are geopolitical risks that are now more severe than they were a couple years ago. On the financial stability front, it’s not just the United States that has had low interest rates—it’s a global phenomenon. I do worry that we may start to see “reach for yield” kinds of behaviors on financial investments that could potentially have broader implications at a time when monetary or fiscal policy can’t react if we get a big negative shock.
- We’re going to have an opportunity over the coming year to think about some of the potential side effects of having low interest rates for a long period of time. How destabilizing is such an environment? Do we see asset bubbles? What is the investment environment being created with monetary policy, and with U.S. fiscal policy? These are the kinds of themes we will be thinking about in the coming year.