Fed VC Fischer reiterated low rates could threaten financial stability
Fed VC Fischer reiterated low rates could threaten financial stability and leave the economy more vulnerable to adverse shocks, in his prepared remarks on Why Are Interest Rates So Low? Causes and Implications. Low rates partly compromise the FOMC's ability to fight recessions. But he said there is currently no evidence now of heightened instability risks. On the various causes of lower interest rates, he noted lower productivity growth (which implies higher savings and reduced investment), demographic changes weighing on growth, weak investment, and developments. Interestingly, he didn't include monetary policy per se. Though he did not address the policy stance specifically, the tone of his comments suggest he'd be supportive of a rate hike this year.