Name: Jerome H. Powell

Summary: A conversation with a Federal Reserve Governor: "We call the process of raising interest rates the normalization process. And so this represents a judgment that we have reached the point at which we can depart from the zero lower bound and begin a gradual process of increasing interest rates. So the reason why you need to do that is that monetary policy -- little things like a 25 basis point increase aren't gonna have a major impact. But over time monetary policy does have a very big impact on the economy and it does so over long periods of time with lags and gaps. So if you so-called "get behind" on monetary policy, you have to raise interest rates too sharply and that can cause a recession. So the right way to go, I think, is to start now with a very small increase and move very gradually to avoid that."

Lean: Neutral

Substantially Similar to Prior Statements: No

Statement Date: December 18, 2015

Publication Date: December 18, 2015

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