While the Federal Reserve has been laying the groundwork to allow it to raise interest rates when appropriate, the termination of special liquidity facilities "need not be followed in short order by the initiation of tightening measures," Fed governor Daniel K. Tarullo said yesterday.
He said it was "important to emphasize" that ending the use of these programs "need not be followed in short order by the initiation of tightening measures."
"Indeed, the relatively modest pace of recovery, the continued high rate of unemployment, subdued inflation trends, and well-anchored inflation expectations together suggest that the need for highly accommodative monetary policies will not diminish soon," Tarullo said, according to prepared text of his remarks released by the Fed.
