Neel Kashkari, Interview: Q&A with the Wisconsin Bankers Association (WBA)

“Well, the federal funds rate is our primary policy tool, moving it up and down. And, the question was, once we got down to zero, is the Fed out of ammunition? And we learned in the ’08 crisis, no, the Fed could use its balance sheet through quantitative easing to try to drive down long-term interest rates and provide more stimulus to the economy. I think that the strategy that the Fed undertook, when it normalized its balance sheet last time, worked quite well. So, they expanded their balance sheet. Then they held it. Then it tapered. And then at some point, they started lifting off the federal funds rate, and then they tapered it to the new size of the balance sheet.”