Fed’s Stein Says Monetary Policy Must Consider Risk to Stability
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Federal Reserve Governor Jeremy Stein said central banks cannot pretend that their policies have no impact on the stability of the financial system.
“There is no general separation principle for monetary policy and financial stability,” Stein said today in prepared remarks for a speech in New York. He was responding to a paper from Michael Feroli, the chief U.S. economist of JPMorgan Chase & Co., and three co-authors, arguing that the Fed’s eventual policy tightening risked causing financial market turmoil.