Federal Reserve of San Francisco President John Williams reiterated his view increasing interest rates is not the best tool to stabilize financial markets in a crisis.
At the American Economic Association, Williams said the tradeoffs are not favorable at all in reaching the central bank’s goals of stable inflation and full employment. He added targeting financial stability with rate policy could undermine Fed’s capability on its goal.
Last month, the central bank raised rates for the first time since June 2006.
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