More NY Fed Williams: - Asked about what`s.....>

FED: More NY Fed Williams: 

- Asked about what`s keeping him up at night: Last few weeks, short-term

interest rate moves, plumbing of financial system. Re MonPol, how does global

uncertainty (`uncharted waters`) affect the U.S., and what is right way for

monetary policy to respond. 

- With lower neutral interest rates (cites `normal` rate of 2.50%), the

benchmark of whether policy is tight or loose is different than in the past.

Says rate currently below `normal` but not by very much. Monetary policy is in

the right place.

- Asked about Fed response in next recession: Recessions `very hard to predict`.

Outlook right now actually very favourable. Response to recession would include

forward guidance (lower-for-longer) and QE.

- Have learned that some of the costs of QE ended up much smaller than some of

the fears; gives us more confidence to use in downturn.

- Fiscal policy would play important supporting role in downturn given low

interest rates.