« The Downward Drift in Real Interest Rates | Main | Fed Watch: Employment Report Ahead »

Thursday, April 03, 2014

'Jeremy Stein to Resign From Fed Board'

When the Federal reserve Board is fully staffed, the Board members outnumber the regional bank presidents 7-5 on the FOMC (the committee that sets monetary policy). Presently, however, the power balance has shifted and it may shift even more:

Jeremy Stein to Resign From Fed Board, by Binyamin Appelbaum, NY Times: Jeremy Stein, a member of the Federal Reserve’s board..., will resign at the end of May and return to his previous role at Harvard. Mr. Stein, who joined the Fed in 2012, needed to return within two years to preserve his tenured professorship. ...
Mr. Stein, an economist and noted academic, has helped to provide an intellectual rationale for the cautious evolution of the Fed’s stimulus campaign, which has not succeeded in returning either unemployment or inflation to normal levels.
He has argued that the Fed should temper its efforts to minimize unemployment because those policies encourage financial risk-taking, which can undermine long-term growth by destabilizing markets and causing new crises. ...
His views remain controversial. ... Mr. Stein’s tenure will be among the shortest in recent Fed history...
His departure could create a fourth vacancy on the seven-member board. Two nominees, Stanley Fischer and Lael Brainard, are awaiting Senate confirmation. Mr. Obama has not announced a nominee for a third vacancy, created last month when Sarah Bloom Raskin became deputy Treasury secretary.

I think the Fed should have been more aggressive, especially early on, but it was probably good to have someone asking questions about QE and risk-taking.

    Posted by on Thursday, April 3, 2014 at 01:07 PM in Economics, Monetary Policy | Permalink  Comments (4)

          


    Comments

    Feed You can follow this conversation by subscribing to the comment feed for this post.