Don't tell Trump/Mnuchin that...

HE adds:

  • If unemployment rate rises that could be a sign of coming recession
  • gradual wind down of balance sheet began when thought it was unlikely to soon return to zero interest rates
  • confidence and economic growth because households leverage has fallen
  • says expects to continue to take slack out of labor market
  • If US economy overshoots full employment far enough thats reason to raise rates
  • He's open-minded on upcoming meeting on possible rate hikes
  • In overshoot of the full employment objective could create imbalances, Fed would need to play catch-up on raising rates
  • Neutral rate not that far away; sees the yield curve getting flatter
  • Prudent risk management means some action to remove accommodation gradually, patiently
  • Fed should review its governance, it's frameworks, its targets and supervision of small banks
  • Any good organization needs to make changes, Fed has a good Process to debate ideas
  • some of low market volatility may be due to Volcker rule, would welcome a review of it
  • stress testing Requirements for big banks are not hurting US economic growth