The Federal Reserve shouldn’t use its interest-rate policy to “fine-tune” financial stability risks, said former Fed Chairman Ben Bernanke on Monday.
Speaking to reporters at the Brookings Institution after he was awarded the Nobel Prize in Economic Sciences, Bernanke said the “first line of defense” is to have strong regulation in place.
“I don’t think we understand that well enough, except in perhaps extreme conditions, to try to fine-tune financial stability using monetary policy,” Bernanke said.
Many Wall Street analysts have argued that the Fed should moderate the rapid pace of its rate increases to avoid something breaking in financial markets.
were lower on Monday.