Financial Stability and Monetary Policy in a Low-Interest-Rate Environment

I thank Kasper Roszbach and the Norges Bank for inviting me to present at this workshop on low-interest-rate and unconventional monetary policy. I applaud the Norges Bank for spurring research on this topic. In a period of less than two decades, the world has experienced two historically deep negative shocks to the global economy and financial system. While their causes were different, the global financial crisis of 2008 and the COVID-19 pandemic crisis each necessitated the intervention of central banks in ways not contemplated in earlier decades. Lessons from the actions taken during the 2008 crisis and recovery and from the large body of research that was generated thereafter helped to inform economic policy during the pandemic. I anticipate that our experience over the past year and a half, as well as research driven by that experience, will help guide policymakers now and in the future. Today, I will share my thoughts on the relationship between monetary policy and financial stability in a low-interest-rate environment. These thoughts are my own and not necessarily those of the Federal Reserve System or of my colleagues on the Federal Open Market Committee.