The Fed will be content to sit on the sidelines to await more definitive evidence as to whether inflation is going to be a problem or not, ... Setting the election aside entirely, the Fed, looking at the incoming data, would say to itself 'right now we don't want to raise interest rates and we don't need to raise interest rates.'
More Quotes from Lyle Gramley:
This time, we're starting with an inflation rate that's too low and heading lower, ... What that means is the Fed will sit still until such time as it sees inflation start turning up -- which might not happen until late 2004 or early 2005.Lyle Gramley
Anyone who sits at that table knows that if the Fed puts his head up in the midst of an election campaign when it's not necessary to do so, that would be a rather foolish thing to do. You don't want people shooting at you unnecessarily - you'd rather live to fight another day.
Lyle Gramley
Mortgage rates haven't been significantly lower than the rates we have today since the 1960s.
Lyle Gramley
He wondered what I was doing and what he might do. I replied that when he leaves government service he's worth an enormous amount of money.
Lyle Gramley
I think the Fed needs to worry about the possibility it's flirting with deflation if it lets this go too far. When nominal rates get down toward zero, the Fed starts running out of ammunition.
Lyle Gramley
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