Tarullo: Fed will 'watch and see' over medium term after Brexit vote

• Tarullo says the reaction 'to this point' has been as expected
• Financial system well prepared for Brexit shock
• We'll have to watch how Brexit plays out
• Three will be some impact in the UK, no one knows the scale

On interest rates in the US:

• I don't believe in 'normalization'
• Recent jobs creation shows there was more slack in jobs market than believed
• "This is not an economy that's running hot"
• The neutral rate of interest rates has come down quite a bit
• We have tools to respond pickup in economy; if it were to slow down our tools our limited
• For some time now, I have thought it was the better course to wait and see if inflation rose to 2%
• For some time now, I have not seen evidence of inflation rising to target
• I would want to be more convinced the underlying rate of inflation is 2%
• I'm not convinced that 2% underlying inflation is coming but that data may come

He's speaking with Jon Hilsenrath and Jacob Schlesinger at the WSJ.