Latest news with #BenBernanke
Yahoo
7 days ago
- Business
- Yahoo
Stanley Fischer, Who Spread Macroeconomic Gospel, Dies at 81
(Bloomberg) -- Stanley Fischer, a professor and practitioner of macroeconomics who helped guide central banks in two countries, Israel and the US, and mentored a younger generation of economic decision-makers, has died. He was 81. Billionaire Steve Cohen Wants NY to Expand Taxpayer-Backed Ferry Where the Wild Children's Museums Are Now With Colorful Blocks, Tirana's Pyramid Represents a Changing Albania The Economic Benefits of Paying Workers to Move NYC Congestion Toll Brings In $216 Million in First Four Months He died on Saturday, the Bank of Israel said in a statement, expressing condolences. Fischer, known as Stan, served as vice chairman of the US Federal Reserve from 2014 to 2017 following eight years as governor of the Bank of Israel, adding to a resume that included time at the Massachusetts Institute of Technology, spells at the International Monetary Fund and World Bank, and a stint as vice chairman of New York-based Citigroup Inc. The roster of MIT students he taught and advised included Ben S. Bernanke, who would go on to become Fed chair and called Fischer his mentor; Mario Draghi, a future European Central Bank president and prime minister of Italy; Lawrence Summers, who would serve as US Treasury secretary under Bill Clinton; Greg Mankiw, who would lead President George W. Bush's Council of Economic Advisers; Kazuo Ueda, named Bank of Japan governor in 2023; and IMF chief economists, including Olivier Blanchard, Ken Rogoff and Maurice Obstfeld. Countless other college undergraduates were introduced to the dismal science by Macroeconomics, the textbook Fischer wrote in 1978 with his MIT colleague, Rudi Dornbusch. The 13th edition of the book was published in 2018. 'It is hard to think of any other macroeconomist alive who has had as much direct and indirect influence, through his own research, his students, and his policy decisions, on macroeconomic policy around the world,' Blanchard wrote of Fischer in 2023. Fischer and Blanchard co-authored Lectures on Macroeconomics, published in 1989. Dispatched on several occasions to extinguish economic emergencies around the world, Fischer drew academic lessons from his first-hand experience with countries in crisis. The pattern began in 1983, when George Shultz, then the US secretary of state, invited Fischer to serve on a joint US-Israeli team of experts helping Israel reverse a prolonged period of weak growth, triple-digit inflation and falling foreign exchange reserves. Their work resulted, in 1985, in an economic stabilization program combining a large reduction in government subsidies with the fixing of the exchange rate, a tightening of monetary policy, and wage and price controls — followed, crucially, by the US supplying a $1.5 billion two-year aid package. That was a prelude to Fischer's tenure as the No. 2 official at the IMF, the lender of last resort to countries in economic peril. Starting in 1994, Fischer traveled the globe to help resolve interrelated financial crises in Mexico, Russia, Brazil, Thailand, Indonesia and South Korea. His role meant he often overshadowed his boss, IMF Managing Director Michel Camdessus. But years later, Fischer credited Camdessus with keeping a sense of calm following the collapse of the Mexican peso in 1994, the first IMF crisis Fischer faced. Emergency Loans 'I thought Western civilization as we knew it was coming to an end,' but Camdessus 'had seen this particular play before,' Fischer recalled. The IMF provided about $250 billion in emergency loans during Fischer's seven years as first deputy managing director, ending in 2001. To accept Israel's 2005 offer to head its central bank, Fischer, an American citizen since 1976, added Israeli citizenship. He conducted business in Hebrew, with an accent that indicated his upbringing in southern Africa. Under his leadership, Israel's central bank was the first to cut rates in 2008 at the start of the global economic crisis, and the first to raise rates the following year in response to signs of financial recovery. In 2011, responding to a global downturn, the bank embarked on a series of rate cuts that pushed the benchmark from 3.25% to a record low 0.1% in 2015. Major changes enacted by Fischer during his eight-year tenure included shifting responsibility for the monthly interest-rate decision from the governor alone to a six-member Monetary Committee, including three outside academics. 'It is testament to Stan's skillful handling of Israel's economy that it is one of the very few advanced economies whose output increased every year through the crisis period,' former Bank of England Governor Mervyn King said in 2013. President Barack Obama appointed Fischer as vice chairman of the Fed Board of Governors under Janet Yellen. Fischer announced his retirement in 2017, a year before his four-year term was to end. He joined BlackRock Inc. as an adviser in 2019. Africa Upbringing Fischer was born on Oct. 15, 1943, in Mazabuka, a town in Zambia, the nation then known as Northern Rhodesia. His family was part of a close-knit community of Jews who had emigrated to southern Africa. His Latvian-born father, Philip, ran a general store. His mother, Ann, had been born in Cape Town, the daughter of Lithuanian immigrants, according to a Financial Times profile. At 13, the family moved to Zimbabwe, then called Southern Rhodesia, where Stanley became active in the Habonim, a Zionist youth group, along with Rhoda Keet, his future wife. In the early 1960s, he spent six months on a kibbutz on Israel's Mediterranean coastal plain, where he combined learning Hebrew with picking and planting bananas. He was introduced to economics through a course in his senior year in high school and moved to the UK to study at the London School of Economics, earning a bachelor's degree in 1965 and a master's in 1966. He chose MIT for his doctorate work so that he could study under future Nobel laureate economists Paul Samuelson and Robert Solow. He said he may have been drawn to macroeconomics 'because I was interested in big questions.' 'I had this image of the world as we knew it having nearly collapsed in the 1930s, and that these guys' — the macroeconomists — 'had saved it,' he said in a 2005 interview with Blanchard. He earned his Ph.D. in economics in 1969, worked as an assistant professor at the University of Chicago, then returned to MIT in 1973 as an associate professor. The first course he taught was monetary economics, alongside Samuelson. He became a full professor in 1977. Bernanke, who earned his Ph.D. from MIT in 1979, traced his interest in monetary policy to a conversation he had with Fischer — 'then a rising academic star' — in the late 1970s. 'Read This' He said Fischer handed him a copy of A Monetary History of the United States, 1867-1960 (1963), by Milton Friedman and Anna J. Schwartz, with the encouragement, 'Read this. It may bore you to death. But if it excites you, you might consider monetary economics.' Bernanke credited Fischer with popularizing the principle that while the Fed pursues goals set by the president and Congress, it has policy independence — freedom to use its tools as it sees fit to achieve those goals. As chief economist of World Bank from 1988 to 1990, Fischer visited China and India and became, he later said, 'gripped by the problem of development.' After Fischer left the IMF in 2001, he joined Citigroup Inc. as a vice chairman and drew on his experience to lead the bank's country risk committee. Fischer declared himself a candidate for the top role at the IMF in 2011, following the resignation of Dominique Strauss-Kahn. At 67, however, he was over the IMF's age limit of 65 for managing directors, meaning he would have needed a change in rules. The job went to Christine Lagarde. In 2013, Fischer was thought to be a possible candidate to succeed Bernanke at the helm of the Fed. Obama instead chose Yellen, with Fischer as her deputy. 'In a just world, Stan would have served at some point as Fed chairman or managing director of the IMF,' Summers wrote in 2017. 'Fate is fickle and it did not happen. But Stan through his teaching, writing, advising and leading has had as much influence on global money as anyone in the last generation. Hundreds of millions of people have lived better because of his efforts.' (Updates list of chief economists Fischer taught in fourth paragraph.) YouTube Is Swallowing TV Whole, and It's Coming for the Sitcom Millions of Americans Are Obsessed With This Japanese Barbecue Sauce Mark Zuckerberg Loves MAGA Now. Will MAGA Ever Love Him Back? Will Small Business Owners Knock Down Trump's Mighty Tariffs? Trump Considers Deporting Migrants to Rwanda After the UK Decides Not To ©2025 Bloomberg L.P. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
7 days ago
- Business
- Yahoo
Stanley Fischer, who spread the macroeconomic gospel, dies at 81
(Bloomberg) — Stanley Fischer, a professor and practitioner of macroeconomics who helped guide central banks in two countries, Israel and the US, and mentored a younger generation of economic decision-makers, has died. He was 81. Billionaire Steve Cohen Wants NY to Expand Taxpayer-Backed Ferry Now With Colorful Blocks, Tirana's Pyramid Represents a Changing Albania Where the Wild Children's Museums Are The Economic Benefits of Paying Workers to Move NYC Congestion Toll Brings In $216 Million in First Four Months He died on Saturday, the Bank of Israel said in a statement, expressing condolences. Fischer, known as Stan, served as vice chairman of the US Federal Reserve from 2014 to 2017 following eight years as governor of the Bank of Israel, adding to a resume that included time at the Massachusetts Institute of Technology, spells at the International Monetary Fund and World Bank, and a stint as vice chairman of New York-based Citigroup Inc. The roster of MIT students he taught and advised included Ben S. Bernanke, who would go on to become Fed chair and called Fischer his mentor; Mario Draghi, a future European Central Bank president and prime minister of Italy; Lawrence Summers, who would serve as US Treasury secretary under Bill Clinton; Greg Mankiw, who would lead President George W. Bush's Council of Economic Advisers; Kazuo Ueda, named Bank of Japan governor in 2023; and two IMF chief economists, Olivier Blanchard and Maurice Obstfeld. Countless other college undergraduates were introduced to the dismal science by Macroeconomics, the textbook Fischer wrote in 1978 with his MIT colleague, Rudi Dornbusch. The 13th edition of the book was published in 2018. 'It is hard to think of any other macroeconomist alive who has had as much direct and indirect influence, through his own research, his students, and his policy decisions, on macroeconomic policy around the world,' Blanchard wrote of Fischer in 2023. Fischer and Blanchard co-authored Lectures on Macroeconomics, published in 1989. Dispatched on several occasions to extinguish economic emergencies around the world, Fischer drew academic lessons from his first-hand experience with countries in crisis. The pattern began in 1983, when George Shultz, then the US secretary of state, invited Fischer to serve on a joint US-Israeli team of experts helping Israel reverse a prolonged period of weak growth, triple-digit inflation and falling foreign exchange reserves. Their work resulted, in 1985, in an economic stabilization program combining a large reduction in government subsidies with the fixing of the exchange rate, a tightening of monetary policy, and wage and price controls — followed, crucially, by the US supplying a $1.5 billion two-year aid package. That was a prelude to Fischer's tenure as the No. 2 official at the IMF, the lender of last resort to countries in economic peril. Starting in 1994, Fischer traveled the globe to help resolve interrelated financial crises in Mexico, Russia, Brazil, Thailand, Indonesia and South Korea. His role meant he often overshadowed his boss, IMF Managing Director Michel Camdessus. But years later, Fischer credited Camdessus with keeping a sense of calm following the collapse of the Mexican peso in 1994, the first IMF crisis Fischer faced. 'I thought Western civilization as we knew it was coming to an end,' but Camdessus 'had seen this particular play before,' Fischer recalled. The IMF provided about $250 billion in emergency loans during Fischer's seven years as first deputy managing director, ending in 2001. To accept Israel's 2005 offer to head its central bank, Fischer, an American citizen since 1976, added Israeli citizenship. He conducted business in Hebrew, with an accent that indicated his upbringing in southern Africa. Under his leadership, Israel's central bank was the first to cut rates in 2008 at the start of the global economic crisis, and the first to raise rates the following year in response to signs of financial recovery. In 2011, responding to a global downturn, the bank embarked on a series of rate cuts that pushed the benchmark from 3.25% to a record low 0.1% in 2015. Major changes enacted by Fischer during his eight-year tenure included shifting responsibility for the monthly interest-rate decision from the governor alone to a six-member Monetary Committee, including three outside academics. 'It is testament to Stan's skillful handling of Israel's economy that it is one of the very few advanced economies whose output increased every year through the crisis period,' former Bank of England Governor Mervyn King said in 2013. President Barack Obama appointed Fischer as vice chairman of the Fed Board of Governors under Janet Yellen. Fischer announced his retirement in 2017, a year before his four-year term was to end. He joined BlackRock Inc. as an adviser in 2019. Fischer was born on Oct. 15, 1943, in Mazabuka, a town in Zambia, the nation then known as Northern Rhodesia. His family was part of a close-knit community of Jews who had emigrated to southern Africa. His Latvian-born father, Philip, ran a general store. His mother, Ann, had been born in Cape Town, the daughter of Lithuanian immigrants, according to a Financial Times profile. At 13, the family moved to Zimbabwe, then called Southern Rhodesia, where Stanley became active in the Habonim, a Zionist youth group, along with Rhoda Keet, his future wife. In the early 1960s, he spent six months on a kibbutz on Israel's Mediterranean coastal plain, where he combined learning Hebrew with picking and planting bananas. He was introduced to economics through a course in his senior year in high school and moved to the UK to study at the London School of Economics, earning a bachelor's degree in 1965 and a master's in 1966. He chose MIT for his doctorate work so that he could study under future Nobel laureate economists Paul Samuelson and Robert Solow. He said he may have been drawn to macroeconomics 'because I was interested in big questions.' 'I had this image of the world as we knew it having nearly collapsed in the 1930s, and that these guys' — the macroeconomists — 'had saved it,' he said in a 2005 interview with Blanchard. He earned his Ph.D. in economics in 1969, worked as an assistant professor at the University of Chicago, then returned to MIT in 1973 as an associate professor. The first course he taught was monetary economics, alongside Samuelson. He became a full professor in 1977. Bernanke, who earned his Ph.D. from MIT in 1979, traced his interest in monetary policy to a conversation he had with Fischer — 'then a rising academic star' — in the late 1970s. He said Fischer handed him a copy of A Monetary History of the United States, 1867-1960 (1963), by Milton Friedman and Anna J. Schwartz, with the encouragement, 'Read this. It may bore you to death. But if it excites you, you might consider monetary economics.' Bernanke credited Fischer with popularizing the principle that while the Fed pursues goals set by the president and Congress, it has policy independence — freedom to use its tools as it sees fit to achieve those goals. As chief economist of World Bank from 1988 to 1990, Fischer visited China and India and became, he later said, 'gripped by the problem of development.' After Fischer left the IMF in 2001, he joined Citigroup Inc. as a vice chairman and drew on his experience to lead the bank's country risk committee. Fischer declared himself a candidate for the top role at the IMF in 2011, following the resignation of Dominique Strauss-Kahn. At 67, however, he was over the IMF's age limit of 65 for managing directors, meaning he would have needed a change in rules. The job went to Christine Lagarde. In 2013, Fischer was thought to be a possible candidate to succeed Bernanke at the helm of the Fed. Obama instead chose Yellen, with Fischer as her deputy. 'In a just world, Stan would have served at some point as Fed chairman or managing director of the IMF,' Summers wrote in 2017. 'Fate is fickle and it did not happen. But Stan through his teaching, writing, advising and leading has had as much influence on global money as anyone in the last generation. Hundreds of millions of people have lived better because of his efforts.' YouTube Is Swallowing TV Whole, and It's Coming for the Sitcom Millions of Americans Are Obsessed With This Japanese Barbecue Sauce How Coach Handbags Became a Gen Z Status Symbol Mark Zuckerberg Loves MAGA Now. Will MAGA Ever Love Him Back? Will Small Business Owners Knock Down Trump's Mighty Tariffs? ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
South China Morning Post
29-05-2025
- Business
- South China Morning Post
Will Trump-induced fears cause Asian capital to flow back home?
Ever since US President Donald Trump unveiled sweeping 'reciprocal' tariffs on nearly all trading partners on April 2, Asia's economies have been at the top of investors' worry list. Concerns initially focused on Asia's acute vulnerability given that it accounts for seven of the 10 economies with the largest trade surpluses with the United States. Advertisement After Trump announced a 90-day suspension of the levies on April 9, capital flows supplanted trade as the main cause for concern. Investors betting on steep declines in Asian currencies amid the onslaught of protectionism missed the forest for the trees. Some of the most trade-reliant Asian economies have massive current account surpluses, part of which were recycled into overseas assets, especially US bonds. Following the 1997-98 Asian financial crisis, policymakers across the region decided that accumulating large foreign currency reserves was a crucial prerequisite for financial stability. By 2007, the aggregate current account surplus of Asia's surplus economies – mainland China, Taiwan, Hong Kong, Japan, South Korea and Singapore – had reached almost US$700 billion, up from nearly US$200 billion in 2000. In 2005, then US Federal Reserve chair Ben Bernanke noted that Asian economies were saving more than they invested at home and had become a net supplier of capital to the rest of the world. The region's 'savings glut', as Bernanke called it , was helping finance America's current account deficit. The former Fed chair questioned whether the imbalance between the US, which accounted for the bulk of global net capital imports, and Asia, which dominated global net lending, was sustainable. By the end of last year, Asian investors – both official sovereign investors, such as central banks, and private ones, like insurance companies – accounted for 45 per cent of foreign holdings of US Treasury bonds . They also accounted for 55 per cent of foreign holdings of debt issued by a US government department or government-sponsored enterprise and nearly 20 per cent of foreign holdings of US stocks, according to data from Societe Generale. Advertisement Yet Trump's return to the White House has cast doubt over the status of the US as a safe haven. In addition to the ruinous trade policies, Trump's reckless tax cuts and spending legislation – projected to add at least US$3 trillion to America's already ballooning public debt in the next decade – is putting US assets under strain and endangering the country's creditworthiness.
Telegraph
25-05-2025
- Business
- Telegraph
The fundamental flaw at the heart of the Bank of England
Andrew Bailey had to admit that the Bank of England had 'some very big lessons' to learn. The policymakers inside the Old Lady of Threadneedle Street appeared to have acted too late to stop inflation soaring to a 41-year high of 11.1pc in October 2022. The hangover from the pandemic and Russia's invasion of Ukraine had upended supply chains around the world but the Bank's interest rate remained at only 2.25pc when UK inflation peaked two and a half years ago. It would not be until August 2023 that interest rates would reach their pinnacle of 5.25pc as the Bank scrambled to bring surging prices under control, leaving households across Britain counting the pennies as the cost of weekly shops rocketed. 'I think there are some very big lessons in how we operate monetary policy in the face of very big shocks,' Bailey told the Treasury select committee in May 2023. 'Because the shocks that we have faced have been unprecedented.' Enter Ben Bernanke. The former head of the US Federal Reserve was tasked with reviewing the Bank of England's forecasting and communications after its failure to predict the sharp rise in prices. Published in April last year, his findings recommended 12 changes the Bank should make, including a number of proposals on how it should resolve communication problems. But there are concerns that the Bank's response could make the situation worse. One reform is a move away from the Bank's central forecast, which deputy governor Clare Lombardelli said was 'quite the philosophical change' for the institution. The forecast on what will happen to things like inflation has been a way of setting out the best collective judgment of the nine-strong Monetary Policy Committee (MPC), which sets interest rates. In February, the forecast showed that the Bank expects inflation to rise sharply to 3.7pc by the third quarter of the year. But now the Bank is moving towards using several 'scenarios' created by staff which help to determine different outlooks for the UK economy and possible inflation paths. It is a process that is still being developed and the Bank still outlined a central prediction that inflation would rise to 3.5pc in the third quarter of 2025, a weakening from the previous report three months earlier. While the central forecast has long been the main focus of the Bank's communication with the public, it has its drawbacks. Lombardelli admitted in a speech earlier this month that the forecast method 'risked the impression that monetary policymakers at the Bank of England put more weight on a single view of the outlook, or that we have more certainty, than we actually do'. Going forward, Threadneedle Street looks set to move towards a forecast that is more in line with other central banks, including the Federal Reserve and the ECB, where staff produce a forecast alongside several scenarios. Speaking in Reykjavík this month, Bailey underlined that a single forecast 'does not work as well in the world we now live in where we are exposed to big shocks to supply as well as demand'. He also warned it also caused problems for members of the MPC, who were being held 'individually accountable for their decisions'. The proposed change is a 'sensible thing' that will help to 'relieve the pressure that came with the unified forecast' says Jens Larsen, head of geoeconomics at Eurasia Group. However, it also will mean that the Bank has to communicate complexity and 'that's inherently a difficult thing to do'. Despite all this it remains clear there is a tension between how the MPC communicates its collective view and how individuals express their perspective. 'More generally, the focus on individuals' votes and specific utterances at parliamentary appearances tends to create an environment which over-weights the importance of individual personalities in the setting of UK monetary policy,' said Huw Pill, the Bank's chief economist, in a speech in October. There is a delicate balance to be struck between ensuring transparency and causing confusion, says Professor Stephen Millard, the interim director of the National Institute of Economic and Social Research (Niesr). 'I don't think you can have too much transparency, but equally, I can understand that if you have one MPC member say one thing one day, and then another MPC member said something completely different the following day that could lead to a lot of confusion, particularly amongst the general public,' he says. Meanwhile Pill remains wary of providing too much insight into his own thinking about the outlook for the UK economy. 'Sometimes I worry about exploring the dark recesses of my own mind ... because I think there are some complexities and uncertainties which are difficult to communicate,' he told the audience during a speech on the monetary policy outlook at Barclays last week. He warned that 'being more transparent about the complexity of discussions complicates the clarity of the collective message of the committee to markets, the public, and media'. This has become 'an important challenge' for the Bank, he said. Also nestled among Bernanke's 12 recommendations is his proposal to eliminate some of the Bank's most complex charts. However, this seemingly innocuous suggestion has faced backlash from a number of economists who believe it will harm communication if they are abandoned. The charts demonstrate the range of possible values for measures ranging from inflation to unemployment. Laura Coroneo, a professor of economics at the University of York, highlighted worries that if the Bank adopted this measure it might lead to a loss of helpful information for the public. 'There is so much uncertainty. It is important to convey this uncertainty also because with scenarios you can only analyse a handful,' she says. Even with recommendations from Bernanke there are still key areas of communication missing from the Bank, according to Millard, of Niesr. 'What the [monetary policy] report and the press conference doesn't do at all well is give you a feel of how policy is likely to respond over the coming months and years,' he says. He said a projection of where each MPC member thinks interest rates are heading in the coming months and years would help to show how the Bank is responding to changes in the UK economy. 'What's missing in the communication, I think, is a sense of how does policy respond to what's going on in the economy,' he said. Yet the outlook for monetary policy is set against a backdrop of unpredictable economic shocks and challenges with data reliability. Pill said all of this has made the Bank of England forecast less reliable. Speaking at a conference in Austria last week, Pill suggested that the Bank needs to 'think about how to evolve our communication' to show the increased level of volatility in its central forecast. 'There may be reasons to think about making inflation forecasts less prominent,' he said. Alongside concerns about forecasts the Bank has set itself the task of improving its accessibility to the general public. It has attempted to do this by requiring the language used in its reports and speeches to be at the reading level of a seven-year-old. More often than not, it falls short on this target with complex jargon used in many briefings. With so much uncertainty in the world economy at present, there has arguably never been greater need for the Bank of England to simplify how it communicates with the public. A key way in which it attempts to do this is at its press conferences. Yet despite meeting eight times a year to decide whether to cut, hold or raise interest rates, it only holds four such briefings. 'Allowing people the opportunity to ask questions more frequently at every Bank of England decision is part of our right,' says Jumana Saleheen, of Vanguard Europe. He said the Bank should be 'standing up in front of people and doing a press conference and being open to questions from the press'. As uncertainty clouds the global economic outlook and the scars of double-digit inflation remain visible, perhaps the one thing that is clear is the need for improved communication from Threadneedle Street. 'A central bank needs to be accountable,' Saleheen said. 'Do we feel that the Bank of England is explaining their decisions at the frequency that's optimal? My view is that it's a bit less than optimal.'
Zawya
22-05-2025
- Business
- Zawya
Plan to beef up Fed forecasts hits hurdle among its regional presidents
A proposal for the U.S. Federal Reserve to release detailed economic forecasts after some of its meetings to anchor the discussion of monetary policy is drawing fire from the heads of its regional banks who worry it will be hard to agree on a common outlook and risks further confusing the public. Fed Chair Jerome Powell flagged the need for improved communications in remarks to a central bank strategy conference last week, and former Fed Chair Ben Bernanke presented a plan for staff-generated economic reports and forecasts that would be released after policy meetings four times a year. In his May 16 presentation, Bernanke said releasing a "transparent, complete and comprehensive macro forecast" would help people better understand Fed decisions and what was likely to follow, while highlighting alternative scenarios would give policymakers more flexibility to change course if the outlook changed - such as when inflation veered higher in 2021. It would also bring the Fed in line with what many of its peers are doing. Atlanta Fed President Raphael Bostic, in comments on Tuesday to reporters at a conference in Florida, called Bernanke's proposal "thoughtful and provocative," but questioned the added value of releasing a staff forecast in real time. Staff forecasts are presented internally at the Federal Open Market Committee's eight policy meetings each year, short descriptions are included in the minutes of each meeting released to the public three weeks later, and the full documentation is published five years later along with meeting transcripts. If the staff forecast is issued in real time, "would this be seen as ... the basis upon which the committee makes decisions? I struggle with that because I don't think it would," Bostic said. Among policymakers "there are 19 views, and if we add the staff report, that would be 20." "There's a hunger out there for something more. And the question I'm wrestling with my team is sort of, what's the way to satisfy that hunger? Is there a way to do it that would not lead to perhaps misleading inferences," Bostic said. Others weighed in at a joint appearance with the Atlanta Fed president and at Bernanke's presentation. "I'm always open to ideas about how we can be more transparent," Cleveland Fed President Beth Hammack said. "Practically, getting the committee to agree on one consensus forecast or even a couple of different scenarios is really challenging, and I do worry that just putting out lots more information might not actually guide the public in the right way ... It may actually leave them more confused." 'NEEDS TO BE SIMPLER' One aim of more detailed forecasts would be to deflect some attention from the quarterly "dot plot" chart of policymaker interest rate projections, a public communications tool that has become something of an annoyance for policymakers across the Fed system. A collection of individual submissions by up to 19 policymakers, the quarterly Summary of Economic Projections and rate projections are not aggregated into a shared outlook. Yet financial markets and the public, Fed officials say, still treat each quarterly release as a policy roadmap with undue weight placed on the median of an often wide distribution of numbers. Analysts complain it also leaves unclear what the Fed is reacting to when the rate outlook changes; whether higher rates, for example, stem from higher expected inflation, different perceptions of risk, or changes in more underlying economic forces. But Bernanke's proposal, so far, has largely just revived a battle he fought unsuccessfully when the Fed was revising its policy approach in 2012. A similar idea then was also criticized by regional Fed bank presidents who have their own technical staff, take varying approaches to modeling the economy, and would be cautious in signing off on any new product meant to shape public expectations. Limiting confusion about the Fed's plans - making clear the basis of rate decisions and the economic factors that cause them to change - is a central theme of policymaker discussions right now. Clear communications are considered important to making monetary policy effective by helping markets trade in more informed ways, decreasing volatility around policy decisions, and helping keep broader public expectations in line with the Fed's 2% inflation target. The existing approach to policy, adopted in 2020 when concerns about the COVID-19 pandemic and related high unemployment were dominant, is likely in for extensive revision driven by a common theme: Simpler is better. Changes made to the Fed's approach five years ago included a promise to use higher inflation to offset periods of lower inflation, to not use a low unemployment rate as a sign in itself of future rises in inflation, and a characterization of maximum employment as a "broad and inclusive" goal. The phrase was meant as a statement of fact about the benefits of maximum employment, and echoed the 1970s law that added a jobs "mandate" to the Fed's responsibilities, but was often construed publicly as the central bank delving into issues of economic equity that it could not really resolve. There's broad agreement inside and outside the Fed that the current approach is too complex and needs to be pared down. "A framework should be robust to a broad range of conditions," Powell said last week, warning, for example, that supply shocks and inflation spikes could become more frequent. "If the objective is to communicate to the public what the Fed is trying to do, what it's looking at, then it needs to be simpler," said Carl Walsh, an economics professor at the University of California, Santa Cruz, who dissected the Fed's 2020 framework in a paper that urged it to be clearer in its framework that maintaining stable inflation was one of the preconditions for achieving its employment goal. Officials continue to debate replacement language for the framework, which is likely to be announced in August at the central bank's annual Jackson Hole symposium in Wyoming. The discussion of what additional material to provide around the Fed's policy meetings is a separate debate being carried out in parallel. Powell last week indicated he wants change, but may face a challenge building consensus over what to do. "A common observation is the need for clear communications as complex events unfold," Powell said. "Clear communication is an issue even in relatively placid times." (Reporting by Howard Schneider; Editing by Paul Simao)
