Fed's Yellen:Â Threats to Financial Stability Are Moderate

The transcript discusses the current state of financial stability, noting that threats are moderate and asset valuations are within historical norms. It highlights weak investment spending, partly due to reduced drilling activity from falling oil prices, but extends beyond that sector. Consumer sentiment and spending are strong. The speaker addresses the scope for further monetary policy action, expressing concerns about the zero lower bound and the large balance sheet, indicating limited scope for future policy adjustments.

How is the current state of financial stability characterized?

• Severe

• Moderate

• Minimal

• Unstable

What is one reason mentioned for the weakness in investment spending?

• Increased consumer spending

• Rising oil prices

• Political stability

• Falling oil prices

What is the current state of consumer sentiment according to the transcript?

• Weak

• Uncertain

• Solid

• Declining

What concern is mentioned regarding the scope for monetary policy?

• High interest rates

• Zero lower bound

• Small balance sheet

• Excessive leverage

What is the current level of the funds rate compared to the normal level?

• At normal

• Unchanged

• Above normal

• Below normal