Fed's Kaplan Sees Rates Near Zero for Up to Three Years

The transcript discusses the Federal Reserve's adoption of new forward guidance incorporating average inflation targeting. The speaker dissents from this guidance, preferring more policy flexibility. They advocate maintaining the current Fed funds rate until the pandemic is over and full employment and price stability are achieved, which may take 2-3 years. The speaker forecasts solid economic growth and a decrease in unemployment by 2023. Concerns are raised about the risks of committing to low rates long-term, potentially encouraging excessive risk-taking in asset markets.

What is the significance of the Fed adopting new forward guidance that incorporates average inflation targeting?

Why did the speaker dissent on the new forward guidance?

What are the potential implications of keeping the Fed funds rate at zero for an extended period?

How does the speaker foresee the economic growth trajectory post-pandemic?

What concerns does the speaker express regarding risk-taking in the asset markets?