Back in the day, when I was a member of the FOMC (1991-2004) I occasionally had an opportunity to push back against a push for greater transparency surrounding monetary policy. I was usually in the minority in thinking that transparency can be taken too far—that the reduction in flexibility for policymakers and the one-way bet [...]
Last week I argued that the “considerable period” language in the FOMC’s post-meeting announcements is not a good idea. It robs the FOMC of flexibility it might need, and it gives the markets too much near term certainty. That does not mean that I think the FOMC should tighten monetary policy immediately. Monetary policy is [...]
________________________________________________________________ “The Committee will maintain the target range for the federal funds rate at 0 to ¼ percent and continues to anticipate that economic conditions . . . are likely to warrant exceptionally low levels of the federal funds rate for an extended period.” – FOMC Press Release 27 January 2010 _________________________________________________________________ “I support your recommendation. [...]
A favorite game at my school was “lets you and him fight” whereby A would tell B that C had been talking trash about him and would often tell C the same thing about B. It was hard for B and C to avoid getting sucked in. I sat beside Gentle Ben Bernanke at the [...]
Financial TV is full of talk about Governor Warsh’s opinion piece in Friday’s Wall Street Journal. One theory is that it was a shot across Chairman Bernanke’s bow. I doubt it, but even if it was in some limited sense, my experience on the FOMC for almost 14 years suggests to me that the following [...]
A: No, Not directly, but Yes Indirectly. Channeling the FOMC I remember once when the head of the trading desk at the New York Fed was giving his report on international operations, the FOMC broke into applause when he announced that there had been no dollar intervention during the past year. While fixed exchange [...]
This morning on financial TV before the Federal Open Market Committee's (FOMC's) scheduled announcement today at 2:15 eastern, someone (Larry Kudlow) asked "Should the Fed begin its exit strategy?" Let me offer the view that it already has. The Fed's balance sheet ballooned last fall and peaked in December. Since then there has been no [...]
If I hadn't worked at the Fed for 36 years, I wouldn't know its history either. Several misconceptions muddy the current debate about the future role of the Fed as systemic risk regulator. The following statements, frequently heard in some forms, are very misleading. 1. The Fed was created to conduct monetary policy; so let [...]
The FOMC met Tuesday and Wednesday. I enjoyed two-day meetings when I was there, but we normally had only two two-day meetings per year, in February and July. The problems have grown lately and so have the number of two-day meetings. The July meeting was usually close to July 4th-closer than this one-and the British [...]
Today's (06-23-09) Wall Street Journal editorial page, of which I'm a fan, contains a fascinating look back at the monetary policy debate in December 2003. During the FOMC meeting on December 9, 2003, then Governor Bernanke referred to a WSJ editorial of that same day (Speed Demons at the Fed) that wondered if the FOMC [...]