New Working Groups for Monetary Policy

The Federal Reserve (Fed) has announced the leaders and objectives of 5 new working groups to improve the implementation of monetary policy. According to the Fed, these groups will examine key areas of monetary policy. The groups, which will be co-chaired by experts from outside the Fed, will focus on communication, balance sheet policy, data, productivity and employment, and inflation frameworks.

Objectives of the Working Groups

■Communication Working Group: Will examine how the Fed communicates its policy assessments and decisions in an uncertain environment.

■Balance Sheet Policy Working Group: Will evaluate the costs, benefits, and institutional implications of the Fed's current balance sheet policy.

■Data Working Group: Will focus on improving the quality and timeliness of the economic indicators used in policy decisions.

■Productivity and Employment Working Group: Will assess the economic impacts of new general-purpose technologies, including artificial intelligence.

■Inflation Frameworks Working Group: Will re-examine how the Fed addresses the drivers of inflation and responds to them.

Participation of Experts

The working groups, which will operate independently with the support of Fed staff, will be responsible for monitoring evidence, providing open feedback, and producing carefully crafted findings for the Federal Open Market Committee (FOMC).

Fed Chairman Kevin Warsh emphasized that the bank's commitment to price stability and maximum employment is unwavering, and that the US economy has changed significantly over the past generation, with this change being more pronounced than ever before.