- - - ( 2018b ). “ safeguarding financial resilience through the cycle, ” speech delivered at the global finance forum, washington, april 19, https : / / www. federalreserve. gov / newsevents / speech / brainard20180419a. htm. lopez - salido, david, jeremy c. stein, and egon zakrajsek ( 2017 ). “ credit - market sentiment and the business cycle, ” quarterly journal of economics, vol. 132 ( august ), pp. 1373 - 1426. - 16 office of the comptroller of the currency, national risk committee ( 2018 ). semiannual risk perspective. washington : occ, fall, https : / / www. occ. gov / publications / publications - by - type / other - publicationsreports / semiannual - risk - perspective / pub - semiannual - risk - perspective - fall2018. pdf. vermilyea, todd ( 2018 ). “ perspectives on leveraged lending, ” speech delivered at the loan syndications and trading association 23rd annual conference, new york, october 24, https : / / cdn. ymaws. com / www. iib. org / resource / resmgr / weekly _ bulletin / 1024fedspeech _ leveraged _ len. pdf. assessing financial stability over the cycle lael brainard federal reserve board december 7, 2018

of course, the central bank or government could quantify the inflation objective. but, under a dual mandate, quantifying one goal and not the other would present problems. i suspect that, if the inflation goal had a numerical target but employment did not, then a central bank would naturally tend to place more emphasis on the quantified goal at the expense of the non - quantified objective. in such a case, this particular suggestion to improve transparency - - numerically pinning down only one objective - - would end up driving the regime. the central bank indeed might want to place differing weights on particular goals, but ease of quantification should not be a determinant of those weights. a second suggestion for improved transparency, distinct from quantified objectives, is that central banks should publish the forecasts that inform policy decisions. historically, the federal reserve has recognized the importance of providing the public with background on its assessment of key underlying macroeconomic forces. twice each year, the federal reserve provides to the u. s. congress an extensive monetary policy report and accompanying testimony, which include the central tendencies of individual fomc members ’ forecasts of key economic magnitudes over the next year or two. going beyond current practice to more frequent publication of further detailed forecasts has disadvantages that need to be recognized. our understanding of the economy is inherently limited, and therefore central banks should not imply that they have more knowledge than they actually do. markets might give too much credence to forecasts backed by central bank credibility, which would create noise and distort the signals from the markets back to the central bank. point - estimate forecasts are especially susceptible to being quickly overcome by new information and becoming soon outdated. besides, committee members consult a wide range of forecasts in the process of reaching their monetary policy decisions. as i have already noted, we have succeeded in conveying after each fomc meeting the main risks to satisfactory economic performance. the balance of risks is not a forecast but does add a forward - looking element to our statements. another challenge regards whether to release the staff ’ s forecast. monetary authorities do not necessarily agree with or act upon the forecasts of their staff. therefore, publication of the staff forecast would give that outlook undue prominence and could potentially be misleading about policy intentions. also, immediate public scrutiny could impinge upon the willingness of the staff to present forecasts that might prove controversial. a third proposal that has been made is to accelerate