A New Era at the Federal Reserve:
Some
Challenges and Opportunities for Change
A Policy Forum Conducted by the Shadow Open Market Committee
Monday, May 8, 2006
11:00 AM (Luncheon To Follow)
Featuring Shadow Open Market Committee members: Charles
Plosser, Cochair; Anna Schwartz, Cochair;
Gregory Hess; Lee Hoskins; Alan
Stockman; Bennett McCallum; and Mickey
Levy.
The Cato Institute
1000 Massachusetts Avenue, NW
Washington, DC
20001
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As Ben Bernanke settles into his new role as chairman of the Federal Reserve,
now is an opportune time for him to reassess certain aspects of the central
bank’s activities and practices. The Shadow Open Market Committee will discuss
some of the dimensions of the challenges facing the Fed. How much further should
the Fed tighten monetary policy? As the Fed considers inflation targeting, what
would be an appropriate measure of inflation to target? To improve transparency,
the Fed needs to provide a more open discussion of what it considers the most
important drivers of inflation and why. In addition, the Fed might consider ways
of conducting policy based on alternative sets of rules or guidelines. The SOMC
will also review the appropriate role of the Fed in select nonmonetary
activities that the Fed has taken on over the years. Do they contribute to the
Fed's performance of its monetary policy responsibility, or are they
time-consuming distractions? Examples include setting margin requirements for
equity purchases, supervising consumer finance, regulating banks, and
intervening in the foreign exchange markets.
