Rodge Cohen Discusses Redefining Full Employment and Increased Stress Tests on Bloomberg<GO>March 31, 2016
On March 31, Mr. Cohen appeared in two segments on Bloomberg<GO>. In the segment titled “Redefining Full U.S. Employment With Rodgin Cohen,” Mr. Cohen discussed the necessity to redefine full employment for the U.S. economy. “There is really a disconcerting disconnect between unemployment levels and job increases on one side, and, on the other side, wage stagnation, and so maybe we need to rethink whether 4.8 percent is really the equivalent of full employment, and maybe it should be down in the low fours or even in the high threes,” Mr. Cohen said. He went on to explain that sustainable wage growth should be a factor in calculating full employment and that Congress should reconsider the Federal Reserve’s mandate, which is employment and inflation, by including sustainable wage growth as a third item.
In the segment titled “Rodgin Cohen: No Question Stress Tests More Stressful,” Mr. Cohen discussed stress tests and the state of the financial services industry, saying, “There is no question that the stress tests applied to the U.S. banks have become substantially, even exponentially, more stressful. The assumptions in this year’s stress test, including now a negative interest rate environment, require banks, by definition, to hold more capital… And the trend is certainly to continue with these very stressful tests.”