Does a scarcity of government bonds make it harder to conduct monetary policy?
I think if you take one of the instruments away, whether it is 30-year or 10-year or whatever, you take some of the flexibility away. Q: If you have fewer long-term bonds, doesn’t that act as a disincentive to banks to lend or hold long-term bonds? A: You can have all kinds of consequences. It might increase competition for loans. We may find there are other efficiencies gained. I don’t want to sound like I am nave, but that is one of the great things about the United States economy. It can integrate and change better than any economy in the world. I think banks, if they were not to have 30-year bonds, would change and innovate. Q: What are the key economic indicators for your district? A: It changes as the economy changes. Right now, I am paying a lot of attention to energy. We have producers out here who are saying, ”Hey, if this (price) stays up, I better increase my capital budget for exploration and drilling.” I look at agriculture: Beef and bulk commodities (have been) a partic
