Monetary Policy

Op-Ed

Misreading the Fed on a Rate Increase

Author: Benn Steil
Wall Street Journal

Benn Steil’s op-ed explains how the mechanics of implementing Federal Reserve monetary policy have changed radically since the crisis. Little known is that the new plumbing is not actually controlled by the FOMC, but by the much smaller Board of Governors. Given that the Board is decidedly more dovish than the FOMC, Fed watchers focused on the latter may be expecting a more aggressive timing and pace of rate rises than is likely.

See more in United States; Monetary Policy

Op-Ed

The Austerity Wars: Debunking Paul Krugman

Author: Benn Steil
Forbes Online

Benn Steil’s new Forbes op-ed examines Paul Krugman's data analysis purporting to document definitively that "austerity," defined by declines in real government purchases, damaged growth between 2010 and 2013. He shows that this finding collapses entirely when he excludes countries without independent monetary policies, such as those in the Eurozone. For countries with independent monetary policies, changes in real government purchases had no effect on growth.

See more in Global; Monetary Policy

Op-Ed

Europe's Bargain

Author: A. Michael Spence
Project Syndicate

A. Michael Spence argues that the eurozone has an opportunity to jumpstart economic recovery by relaxing fiscal constraints on the condition that member states use the reprieve to initiate public sector investment and structural reforms.

See more in Europe; Monetary Policy; Budget, Debt, and Deficits

Foreign Affairs Article

Taper Trouble

Author: Benn Steil

Benn Steil's essay in the July/August issue of Foreign Affairs looks at the international consequences of U.S. monetary policy action. He argues that developing-nation governments are coming to see the need for engineering current-account surpluses and large dollar-reserve stockpiles as a means of insulating themselves against Fed-induced capital-flow whiplash. As this amounts to "currency manipulation" in the eyes of U.S. policymakers, trade tensions are apt to grow.

See more in Ukraine; United States; Monetary Policy; International Finance

Video

Can a Rule-Based Approach to Monetary Policy Enhance Economic Growth and Stability?

Speaker: Charles I. Plosser
Presider: Joyce Chang

Philadelphia Fed president Charles Plosser joins Joyce Chang of J.P. Morgan to discuss his views on monetary policymaking. Plosser advocates for a systematic monetary policy in which discretion and judgment are replaced by a more rule-based approach of reacting in predictable ways to particular economic conditions.

See more in Global; Monetary Policy

Transcript

On the Road to Recovery, or Creating the “Mother of All Bubbles”?

Speakers: Joyce Chang, Nouriel Roubini, and Sebastian Mallaby

With the tapering of the Federal Reserve's bond buying program well underway, and the possibility of future interest rate hikes under discussion, J.P. Morgan's Joyce Chang and Nouriel Roubini of Roubini Global Economics assess the risks that exist in the current global financial system in a discussion with CFR's Sebastian Mallaby.

See more in Global; Politics and Strategy; Monetary Policy

Audio

On the Road to Recovery, or Creating the “Mother of All Bubbles”?

Speakers: Joyce Chang and Nouriel Roubini
Presider: Sebastian Mallaby

With the tapering of the Federal Reserve's bond buying program well underway, and the possibility of future interest rate hikes under discussion, J.P. Morgan's Joyce Chang and Nouriel Roubini of Roubini Global Economics assess the risks that exist in the current global financial system in a discussion with CFR's Sebastian Mallaby.

See more in Global; Politics and Strategy; Monetary Policy

Video

On the Road to Recovery, or Creating the “Mother of All Bubbles”?

Speakers: Joyce Chang and Nouriel Roubini
Presider: Sebastian Mallaby

With the tapering of the Federal Reserve's bond buying program well underway, and the possibility of future interest rate hikes under discussion, J.P. Morgan's Joyce Chang and Nouriel Roubini of Roubini Global Economics assess the risks that exist in the current global financial system in a discussion with CFR's Sebastian Mallaby.

See more in Global; Politics and Strategy; Monetary Policy

Primary Sources

Federal Reserve Chair Semiannual Monetary Policy Report to the Congress

These semiannual reports and testimony are required by the Federal Reserve Act and are submitted to the Senate Committee on Banking, Housing, and Urban Affairs and to the House Committee on Financial Services. The Monetary Policy report and related testimony are the Federal Reserve's analysis of "the conduct of monetary policy and economic developments and prospects for the future."

See more in United States; Financial Crises; Monetary Policy