Stern, Gary

Asked whether there would be FOMC concern about running out of room to cut rates or about running into the "zero bound" on rates, Stern replied, "Personally, I think the bigger issue is that when you get short-term rates that low, for some institutions like money market funds it's very hard for them to be in the business, because there's no room between the cost of their funds and the return on their assets.  So there are some structural or institutional issues that might come into play, but beyond that I'm not sure I see much."

"If you think that the economic outlook requires a lower target, then I think that you should implement it, in my judgment, but with the caveat that I just gave: bearing in mind that there may be institutional reasons why you may prefer to avoid reducing rates," Stern said.

"So you have to weigh those things," he said. "Otherwise, I would say that if the outlook seems to require it then you should do it."

Asked whether the doubling in size of the balance sheet represents "quantitative easing," Stern said "I don't think that's a bad statement.   I think the world is a little more complicated than that, but I don't think that's a bad statement."