The substantial uncertainty about the path of asset price movements going forward necessarily reduces the case for altering policy in advance of the move.

In the financial system we have today, with less risk concentrated in banks, the probability of systemic financial crises may be lower than in traditional bank-centered financial systems

The plausible outcomes range from the gradual and benign to the more precipitous and damaging.

The choice is between which mistake is easier to correct: underdoing it or overdoing it.

Some think that by preparing to deal with crises you make them more likely. I think the wiser judgment is the contrary. In this area at least, if you want peace or stability, it's better to prepare for war or instability

The world is likely to view any temporary extension of the income tax cuts for the top two percent as a prelude to a long-term or permanent extension, and that would hurt economic recovery as well by undermining confidence that we're prepared to make a commitment today to bring down our future deficits.

As financial markets continue to broaden and deepen, the behavior of asset prices will play an important role in the formulation of monetary policy going forward, perhaps a more important role than in the past.