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.

The rest of the world needs the U.S. economy and financial system to recover in order for it to revive. We remain at the center of global economic activity with financial and trade ties to every region of the globe.

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

The major economic policy challenges facing the nation today - pick your favorites among the usual suspects of low public and household savings, concerns about educational quality and achievement, high and rising income inequality, the large imbalances between our social insurance commitments and resources - are not about monetary policy.

Monetary policy itself cannot sensibly be directed at reducing imbalances.

If you don't try to generate more revenues through tax reform, if you don't ask, you know, the most fortunate Americans to bear a slightly larger burden of the privilege of being an American, then you have to - the only way to achieve fiscal sustainability is through unacceptably deep cuts in benefits for middle class seniors, or unacceptably deep cuts in national security.

The government can help, but we need to make this transition now to a recovery led by private investment.