Transcript
Raphael Bostic: The Fed helps to keep our financial system—and the economy—stable by making sure that our banking institutions are not taking on too much risk, and by making sure that our monetary policy creates conditions so that businesses and consumers can make plans for the future and invest in ways that help our economy grow in a sustainable way.
The work that we do at the Fed is important for me personally because the Fed touches everything that we try to do. I spent most of my career trying to make sure that regular people have access to the American dream, and opportunities to achieve and strive. And the things that we do at the Federal Reserve help that in very direct ways—whether it be monetary policy, banking supervision, or even our work with the payments system—we're present in people’s lives in a way that helps them be better.
If there were no Fed, I think you would see hits to both of the missions that we have. In terms of stable price level, I think we would wind up seeing prices be far more volatile, such that we wouldn't know from day to day what people would pay for their basic goods—food and clothes and the like—and that instability would be very harmful for long-term investment.
And as for maximizing employment, I think we would see firms far less likely, and far less willing, to invest in a workforce. And they wouldn't know, five years from now, what prices they would be able to charge, or what their investments would be able to produce in the future.