Fed Chair Kevin Warsh Launches 5 Task Forces to Rethink Monetary Policy
Updated
Updated · Financial Times · Jul 24
Fed Chair Kevin Warsh Launches 5 Task Forces to Rethink Monetary Policy
3 articles · Updated · Financial Times · Jul 24
Summary
Five task forces unveiled by new Fed Chair Kevin Warsh will review key parts of monetary policy in what the report describes as a more ambitious self-examination than the framework review under Jay Powell.
Warsh has signaled the Fed should pay closer attention to money supply growth, reopening debate over monetarism after decades in which the central bank focused mainly on inflation and employment.
Stephen Miran, who left a temporary Fed role in May, has argued the law already requires the Fed to monitor monetary and credit aggregates and has promoted a divisia approach that weights different forms of money by liquidity.
That push faces intellectual resistance: Thomas Sargent, tapped to lead one of Warsh’s task forces, co-wrote “Some Unpleasant Monetarist Arithmetic,” a landmark critique of monetarism’s limits.
The broader question is whether Warsh’s review will merely revisit old debates or materially shift how the Fed measures money, judges inflation risks and interprets its statutory mandate.