There were several Federal Reserve speeches today. Philadelphia Fed president Santomero in his last speech before stepping down as president discusses The U.S. Economy: How Fast Can We Grow?. After the speech he indicated that the target rate is near the neutral range and that the Fed must begin to take seriously lags in the effects of policy at its next meeting:
"Actions take time to work through the system ... We have to be cautious. As we go about raising rates, it will take some time to be fully felt in the system," Santomero said ... "That is part of the logic that has to go into the next decision" on interest rates, he said.
Dallas Fed president Fisher also spoke today on Trade Deficits and the Health of the U.S. Economy. Finally, Roger Ferguson gave a speech on Globalization, Insurers, and Regulators and expresses worry that puzzlingly low long-term rates might suddenly increase.