https://www.brookings.edu/opinions/the-c...hs-powell/

Short but interesting opinion piece on the challenges that Powell will have when he succeeds Yellen as the next Fed Chair. Perhaps the most interesting part of the piece is the question of what can we do when the next recession hits - especially if it happens in the not too distant future.

Quote:The next recession. Sometime in his four-year term, Mr. Powell may confront a recession. In past recessions, the Fed has cut interest rates by four or 5 percentage points, but few Fed officials see short-term interest rates rising above 3.25% in the next few years. That would make a four- or five-point rate cut impossible. So if a recession hits, Mr. Powell will have to consider unconventional monetary policies–more bond buying, perhaps even negative interest rates–and that may not be popular inside or outside the Fed.

Mr. Powell has been at the Fed for five years as Ben Bernanke and Janet Yellen successfully steered the economy to a pretty good place. I don’t know what Mr. Trump told Mr. Powell when he gave him the nod, but I can bet what he was thinking: “Don’t screw it up, Jay.” We are all thinking pretty much the same thing.

As mentioned above, we don't have the same amount of room to stimulate the economy via monetary policy if another recession occurs in the next few years - assuming the interest rate increases continue on a slow, measured pace due to the fact that core inflation is still below the 2.0% target. IMHO, a new recession in the near term would have to be dealt with via Fiscal Policy measures instead. That means we would have to go back to the more traditional Keynesian methods of stimulation.