Leadership challenges facing the next Fed chair
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Event Summary

How much can the Federal Reserve keep buying, and to what extent can it expand its balance sheet? Moreover, what are the limits of monetary policy? At an AEI event on Thursday, financial experts joined AEI's Alex Pollock to discuss the pending challenges facing the next Fed chair. Peter Fisher of BlackRock Investment Institute highlighted that Federal Open Market Committee members do not agree on what forward guidance means. Consequently, he urged the Fed to clarify its theory of expectations.

AEI's John Makin argued that markets and policymakers have placed the Fed on an unrealistic pedestal, expecting it to do more than it can. He said that while the Fed's emergency actions during the financial crisis bolstered the economy, the Fed faces a difficult task in maintaining a low and stable rate of inflation while remembering that it cannot affect unemployment.
 
AEI's Stephen Oliner posed a dilemma: if the economy remains sluggish despite the Fed's optimistic forecast, how long will the Fed continue to expand its balance sheet and how will it extend forward guidance in the future? Conversely, what if the economy fares better than forecasted and the inflation rate increases? Oliner argued that Fed guidance should not rely excessively on fallible forecasts.
--Rahee Jung

Live blog from the event

Event Description

President Obama will soon nominate the next chair of the Federal Reserve Board of Governors, coming at a time when the Fed balance sheet has inflated to the unprecedented size of $3.6 trillion, including $1.3 trillion in mortgages.  Since the financial crisis, the Fed has been following an aggressive "easy money" strategy, including buying $85 billion of bonds and mortgages each month and keeping real short-term interest rates negative. What’s next? Can the Fed stop now?

At this event, Fed policy experts will discuss the leadership challenges facing the next Fed chair, including continuing or ending quantitative easing, dealing with systemic risk, addressing the effects of the Fed’s actions on other countries, and meeting the Fed's statutory mandates for stable prices, employment, and moderate long-term interest rates.

If you are unable to attend, we welcome you to watch the event live on this page. Full video will be posted within 24 hours.

Learn more about the 3 challenges awaiting the next Federal Reserve chair:

Agenda

11:45 AM
Registration and Buffet Lunch

12:00 PM
Panelists:
Peter Fisher, BlackRock Investment Institute
John H. Makin, AEI
Stephen D. Oliner, AEI

Moderator:
Alex J. Pollock, AEI

1:30 PM
Adjournment

Event Contact Information

For more information, please contact Emily Rapp at emily.rapp@aei.org, 202.419.5212.

Media Contact Information

For media inquiries, please contact MediaServices@aei.org, 202.862.5829.

Speaker Biographies

Peter Fisher is a senior director at the BlackRock Investment Institute and a senior fellow at the Center on Global Business and Government at the Tuck School of Business at Dartmouth College. From 2007 to 2013, Peter served as cohead and then head of BlackRock's Fixed Income Portfolio Management Group. From 2005 to 2007, he served as chairman of BlackRock Asia. Before joining BlackRock in 2004, he served from 2001 to 2003 as under secretary of the US Treasury for Domestic Finance. He worked at the Federal Reserve Bank of New York from 1985 to 2001, concluding his service as executive vice president and manager of the Federal Reserve System Open Market Account.

John H. Makin
is a former consultant to the US Department of the Treasury, the Congressional Budget Office, and the International Monetary Fund. He specializes in international finance and financial markets (stock, bonds, and currencies including the euro and the US dollar). He also researches the US economy (including monetary policy and tax and budget issues), the Japanese economy, and European economies. He is the author of numerous books and articles on financial, monetary, and fiscal policy. Makin writes AEI's monthly Economic Outlook.

 Stephen D. Oliner, an economist who joined AEI after a career at the Federal Reserve Board that spanned more than 25 years, held a number of high-level posi¬tions at the Fed, most recently serving as a senior adviser in the Division of Research and Statistics. He was actively involved in the Fed’s analysis of the US economy and financial markets, and his research spanned a wide range of topics, including monetary policy, business capital spending, productivity growth, commercial real estate and the measurement of capital. Concurrent to his position at AEI, Oliner is a senior fellow at the University of California, Los Angeles’s Ziman Center for Real Estate. He also maintains an economic consulting practice.

Alex J. Pollock
joined AEI in 2004 after 35 years in banking. He was formerly president and CEO of the Federal Home Loan Bank of Chicago from 1991 to 2004. He is also the author of numerous articles on financial systems and the organizer of the Living in the Post–Bubble World series of AEI conferences. In 2007, he developed a one-page mortgage form to help borrowers understand their mortgage obligations. At AEI, he focuses on financial policy issues, including housing finance, government-sponsored enterprises, retirement finance, corporate governance, accounting standards, and the banking system. He is the lead director of CME Group, a director of Great Lakes Higher Education Corporation and the International Union for Housing Finance, and chairman of the board of the Great Books Foundation.

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AEI Participants

 

John H.
Makin
  • John H. Makin is a resident scholar at the American Enterprise Institute (AEI) where he studies the US economy, monetary policy, financial markets, corporate taxation and banking. He also studies and writes frequently about Japanese, Chinese and European economic issues.

    Makin has served as a consultant to the US Treasury Department, the Congressional Budget Office, and the International Monetary Fund. He spent twenty years on Wall Street as the chief economist, and later as a principal of Caxton Associates a trading and investment firm. Earlier, Makin taught economics at various universities including the University of Virginia. He has also been a scholar at the Bank of Japan, the Federal Reserve Bank of San Francisco, the Federal Bank of Chicago, and the National Bureau of Economic Research. A prolific writer, Makin is the author of numerous books and articles on financial, monetary, and fiscal policy. Makin also writes AEI's monthly Economic Outlook which pairs insightful research with current economic topics.

    Makin received his doctorate and master’s degree in economics from University of Chicago, and bachelor’s degree in economics from Trinity College.


    Follow John Makin on Twitter.

  • Phone: 202-862-5828
    Email: jmakin@aei.org
  • Assistant Info

    Name: Brittany Pineros
    Phone: 202-862-5926
    Email: brittany.pineros@aei.org

 

Stephen D.
Oliner
  • Stephen D. Oliner is a resident scholar at the American Enterprise Institute (AEI) and a senior fellow at the University of California, Los Angeles (UCLA) Ziman Center for Real Estate.

    Oliner joined AEI after spending more than 25 years at the Federal Reserve Board. An economist by training, Oliner held a number of high-level positions at the Fed and was closely involved in the Fed's analysis of the US economy and financial markets. Since leaving the Fed, Oliner has become well known for his analysis of US monetary policy and has maintained an active research agenda that focuses on real estate issues and the US economy’s growth potential.  He is coprincipal developer of the AEI Pinto-Oliner Mortgage Risk, Collateral Risk, and Capital Adequacy Indexes.

    Oliner has a Ph.D. and an M.S. in economics from the University of Wisconsin. He received a B.A. in economics from the University of Virginia.

  • Phone: 202.419.5205
    Email: stephen.oliner@aei.org
  • Assistant Info

    Name: Emily Rapp
    Phone: 202.419.5212
    Email: emily.rapp@aei.org

 

Alex J.
Pollock
  • Alex J. Pollock is a resident fellow at the American Enterprise Institute (AEI), where he studies and writes about housing finance; government-sponsored enterprises, including Fannie Mae, Freddie Mac, and the Federal Home Loan Banks; retirement finance; and banking and central banks. He also works on corporate governance and accounting standards issues.


    Pollock has had a 35-year career in banking and was president and CEO of the Federal Home Loan Bank of Chicago for more than 12 years immediately before joining AEI. A prolific writer, he has written numerous articles on financial systems and is the author of the book “Boom and Bust: Financial Cycles and Human Prosperity” (AEI Press, 2011). He has also created a one-page mortgage form to help borrowers understand their mortgage obligations.


    The lead director of CME Group, Pollock is also a director of the Great Lakes Higher Education Corporation and the chairman of the board of the Great Books Foundation. He is a past president of the International Union for Housing Finance.


    He has an M.P.A. in international relations from Princeton University, an M.A. in philosophy from the University of Chicago, and a B.A. from Williams College.


  • Phone: 202.862.7190
    Email: apollock@aei.org
  • Assistant Info

    Name: Emily Rapp
    Phone: (202) 419-5212
    Email: emily.rapp@aei.org
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