The task forces

The Fed has announced the leadership and objectives for five independent task forces in charge with advancing the conduct of monetary policy. This initiative, assembles an impressive roster of economists, business leaders, and former central bankers to critically examine and improve how the Fed operates in a rapidly evolving economy. The five task forces, their objectives and their leaders are:

•  Communications: Enhancing how the Fed conveys policy amid uncertainty (led by Mervyn King, Peter R. Fisher, Arminio Fraga).

•  Balance Sheet Policy: Reviewing costs, benefits, and implications of the current regime (Raghuram Rajan, Karen Dynan, Jeremy Stein).

•  Data: Improving quality and timeliness of real economic signals (Doug McMillon, Raj Chetty, Kevin Murphy).

•  Productivity and Jobs: Assessing impacts of AI and new technologies (Marc Andreessen, Charles I. Jones, Asha Sharma).

•  Inflation Frameworks: Revisit understanding and response to inflation drivers (Greg Mankiw, Thomas Sargent, William White).

What can we discern from these announcements? It’s clear that chairman Warsh wants to conduct monetary policy outside of the traditional Fed’s channel and views. Perhaps we’ll see less econometric models and more business and practical approach. But as Mike Tyson used to say: “everybody has a plan until their punched in the face”. Former central bankers, and business leaders will bring a fresh approach to an old problem, and it will be interesting to see if the Fed and Congress (whom the Fed reports to) are willing and able to tolerate a non conventional approach when the time comes.

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