Under current law, on January 1, 2013, there's going to be a massive fiscal cliff of large spending cuts and tax increases.

I don't see much evidence of an equity bubble.

The economist John Maynard Keynes said that in the long run, we are all dead. If he were around today he might say that, in the long run, we are all on Social Security and Medicare.

It's true that the Federal Reserve faces a lot of political pressure and is unpopular in many circles.

Achieving price stability is not only important in itself, it is also central to attaining the Federal Reserve's other mandate objectives of maximum sustainable employment and moderate long-term interest rates.

The risk exists that, with aggregate demand exhibiting considerable momentum, output could overshoot its sustainable path, leading ultimately in the absence of countervailing monetary policy action to further upward pressure on inflation.

Although low inflation is generally good, inflation that is too low can pose risks to the economy - especially when the economy is struggling.