Boston Fed President Eric Rosengren warned in a paper, to be presented at a conference this week end, that the current policy buffers , “may not be sufficient to offset future shocks, reducing the capacity available to policymakers to insulate the economy from future adverse shocks”. And he urged “more attention should be given to establishing appropriate policy buffers to mitigate future shocks.”
And, Fed should either build a “larger monetary policy buffer” or be ready to use unconventional tools more aggressively. He added that “these tools have proven to be politically controversial, making their aggressive deployment, or even their deployment at all, less certain in response to a future economic downturn.”
