Fed Tarullo: the world financial system "is pretty well prepared" for the Brexit shock
- US Response to Brexit generally in line with our expectations.
- wait to see what will be the macroeconomic consequences of Brexit.
- relevant interest rate depends on the factors affecting the economy.
- the overheating of the US economy is not a danger.
- the Fed probably does not provide much stimulus as many believe.
- Fed has the tools for an adequate response in the event of a sharp acceleration in economic growth.
- for Fed is better to wait for new evidence of rising inflation.
- low interest rates may give rise to financial instability, but this may not be sufficient to justify rate hikes.
- currently there are no worries about financial instability, "bubbles" in asset classes.