Economics and Policy The Fed and Market Exuberance

Q&A with Randall S. Kroszner, former Governor of the Federal Reserve

05 Jun 2020

The Fed is in a difficult dilemma as it welcomes market optimism as a positive for the real economy but must, at the same time, be concerned about excessive exuberance given the fundamental challenges ahead. This according to Randall S. Kroszner, Professor of Economics at University of Chicago Booth School of Business, and a former Governor of the Federal Reserve System from 2006 until 2009 as well as a former member of the President's Council of Economic Advisors from 2001 until 2003 during the George W. Bush administration. Dr Kroszner warns that there are deflation risks ahead, and that even though the Fed clearly wants to avoid negative interest rates, they might have to actively consider them.

Randall S. Kroszner spoke to Beat Siegenthaler of the UBS Knowledge Network from London on 5 June 2020.

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The views expressed in this interview are those of the interviewee and do not necessarily reflect those of UBS.