The impact on the broader economy and financial markets of the problems in the subprime markets seems likely to be contained.

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.

I don't think that Chinese ownership of U.S. assets is so large as to put our country at risk economically.

The basic prescription for preventing deflation is therefore straightforward, at least in principle: Use monetary and fiscal policy as needed to support aggregate spending, in a manner as nearly consistent as possible with full utilization of economic resources and low and stable inflation. In other words, the best way to get out of trouble is not to get into it in the first place.

Weaker currencies abroad mean a strong dollar, and a stronger dollar, together with a weak global environment, is a drag on the U.S. economy. So it's important, as it affects overall levels of production and employment in the U.S. There are many domestic industries doing well in the United States, notwithstanding a strong dollar.

The Federal Reserve will not monetize the debt.

Developments in financial markets can have broad economic effects felt by many outside the markets.