FOMC member Yellen is currently speaking about the US economy at the Levy Economics Institute in New York. Her comments have included:

  • Fed may have to target/rupture asset bubbles
  • Bubbles are hard to identify and address
  • Ignoring bubbles can have grave consequences
  • Credit market bubbles are particularly pernicious
  • Sees signs of tentative economic improvement
  • Bank regulation can also deal with some asset bubbles
  • May be times to aim tighter policy at asset bubbles
  • Severe downside risks persist, recession end unclear
  • Global slide will likely prolong recession
  • Economy is still contracting on broad weakness
  • Aggressive policy response key to dealing with the crisis