10 basic and key questions that the Senators failed to ask Janet Yellen
at her confirmation hearings. Who is prepping these folks?
Questions Senators were too naive to ask Yellen:
1. You wrote about
optimal control (OC) ie allow inflation above target. Do you support OC?
2. You wrote a few times that inflation may have to go above target for a
while to reduce labor slack. Do you support this optimal control?
3. Do you agree with Governor Stein that macro-pru will not be
sufficient to control bubbles? Would you raise rates sooner to prick
bubbles?
4. While you say no bubble today what is the risk that slow QE exit
& policy rate normalization (4 yrs) will cause bubbles down the
line?
5 . If the current approach to too-big-to-fail will not work would you
down the line support breaking up big banks to deal with TBTF?
6. What will be Fed losses of paying interest on excess reserves of $3
trillion+ when you will normalize policy rates to 4%? 120bn a year?
7. Fed criteria for taper is a cumulative improvement in labor mkt
outlook. Aren't we there now given fall in Un Rate & 180K jobs per
month?
8. After ZIRP, QE, CE, FG growth is still weak & mon pol
ineffective? Wouldn't a better policy mix be more fiscal stimulus &
less monetary?
9. What is risk of fiscal dominance as Fed is effectively monetizing
public debt? Should mon pol be used to nudge congress to cut deficit?
10. What is risk of debt dominance, ie Fed unable to raise rates fast
enough as high public/household debt requires low debt service ratio? - via twitter
Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics