Part 3: Risks to the Fed's Pause Policy

May 16, 2012 | Louisville Ky.

President Bullard explains that the main risk to the Fed's pause policy is that the FOMC will, as it has in the past, overcommit to the ultra-easy policy, which could reignite the global inflation debacle of the 1970s. He also explores why it may be better to focus on labor market policies to directly address unemployment instead of taking further risks with monetary policy. He explains how the near-zero rates cause other distortions in the economy, such as punishing savers.

Presentation: "The Fed on Pause"