On Balance: All Things Considered on the Road to Normal
Philadelphia Fed President Patrick Harker discussed the U.S. and global economies and the Fed?s monetary policy outlook at the Official Monetary and Financial Institutions Ninth Economists? Meeting in Frankfurt, Germany. Regarding unwinding the balance sheet, Harker said a "slow and steady approach" that leads to a gradual decrease in average reserves is ?not only the safer option, it has the additional advantage of reducing uncertainty. ..."
Allan Meltzer: How He Underestimated His Own Contribution to the Modern Concept of a Central Bank
In his great work A History of the Federal Reserve System, vol. 1, Allan Meltzer contended that monetary policymakers in the Depression simply ignored the quantity theoretic prescriptions that would have prevented contractionary monetary policy. Practically, he was arguing that the Fed should have accepted the responsibilities for economic stabilization now taken for granted with the modern concept of a central bank. In reality, decades of monetarist criticism had to pass before the Fed accepted both responsibility for the behavior of the price level and economic stabilization. In effect, ...
A Solution to Every Puzzle
Remarks at the 2020 U.S. Treasury Market Conference (delivered via videoconference).
A Steady Anchor in a Stormy Sea
Remarks at SNB-FRB-BIS High-Level Conference on Global Risk, Uncertainty, and Volatility, Zurich, Switzerland.
Does the Fed Have a Financial Stability Mandate?
Governments around the world have devoted increasing attention to maintaining overall financial system stability. Central banks play strong roles in domestic financial stability policy, but the full scopes of their financial stability mandates are ambiguous. The Federal Reserve appeared to embrace a stronger role in financial system stability starting in the late 1960s and accelerating with its unprecedented actions during the 2007?08 financial crisis. Questions remain, however, about the proper scope and design of a central bank?s financial stability mandate.
The Outlook for the Economy and Monetary Policy: Low-Frequency Policymaking in a High-Frequency World
Good afternoon. I thank Ellen Zentner and the New York Association for Business Economics for the invitation to speak to you today. I believe that one of the important responsibilities of a Federal Reserve policymaker is to share his or her economic perspectives with the public. Congress has wisely given the Fed independence in making monetary policy decisions in pursuit of our statutory goals of price stability and maximum employment. I say "wisely" because a body of research and practical experience both here and abroad show that when central banks formulate monetary policy free from ...
Global Issues, Global Implications
Remarks at the Central Reserve Bank of Peru (BCRP) Centenary Conference (delivered via videoconference).
Central Bank Digital Currencies: An Old Tale with a New Chapter
We consider the debut of a new monetary instrument, central bank digital currencies (CBDCs). Drawing on examples from monetary history, we argue that a successful monetary transformation must combine microeconomic efficiency with macroeconomic credibility. A paradoxical feature of these transformations is that success in the micro dimension can encourage macro failure. Overcoming this paradox may require politically uncomfortable compromises. We propose that such compromises will be necessary for the success of CBDCs.
Recent Global Developments and Central Bank Responsibilities in a Changing Risk Landscape
Remarks at the Official Sector Service Providers (OSSP)-Bank Negara Malaysia (BNM)-South East Asian Central Banks (SEACEN) Research and Training Centre Forum on Central Bank Foreign Currency Operations.
More Stories of Unconventional Monetary Policy
This article extends the work of Fawley and Neely (2013) to describe how major central banks have evolved unconventional monetary policies to encourage real activity and maintain stable inflation rates from 2013 through 2019. By 2013, central banks were moving from lump-sum asset purchase programs to continuing asset purchase programs, which are conditioned on economic conditions, careful communication strategies, bank lending programs with incentives and negative interest rates. This article reviews how central banks tailored their unconventional monetary methods to their various challenges ...