BOSTON — Federal Reserve vice chairwoman Janet Yellen Wednesday night said she sees the chance of adverse shocks, downside risks and even an argument for extending zero rates through 2015.
Speaking to the Boston Economic Club, Yellen presented her reasons for more accommodation, from insurance against what might happen and to accelerate what hasn’t happened yet: a return to full employment.
Answering questions after the speech, she said the FOMC has to “sort through” whether more stimulus is needed, and if so, what form it should take.
“It may well be appropriate to insure against adverse shocks that could push the economy into territory where a self-reinforcing downward spiral of economic weakness would be difficult to arrest,” she suggested.
