Discord in the Fed

There is a bit of discord at the Fed. After Minneapolis Fed President Narayana Kocherlakota said earlier this week that the FOMC should consider raising interest rates later this year rather than maintain zero interest rate policy through 2014 (as is the current position of the Fed), vice chairwoman Janet Yellen remarked that ZIRP might actually need to be extended as far as 2015. The former San Francisco Fed President further commented in her speech at the Money Marketeers club of New York University that there has been “a significant shortfall in the overall amount of monetary policy stimulus since early 2009.”

Then, at a meeting of the National Economics Club I was attending this afternoon, Philadelphia Fed President Charles Plosser note that when QE2 was launched in 2010 that unemployment was soaring and inflation was nill, and that because unemployment is falling and inflation is picking up that rather than talk about the need for QE3 we should be looking to tighten monetary policy.

After making this remark he backed off a bit and said he wasn’t suggesting we should actually tighten monetary policy but rather just take it as a hypothetical response relative to the perceived need for QE3.

Discord indeed.

At least the Federal Reserve appears to be about as conflicted as the blogosphere is on what to do and when to do it.

Anthony Randazzo

Anthony Randazzo is director of economic research for Reason Foundation, a nonprofit think tank advancing free minds and free markets. His research portfolio is regularly evolving, and he maintains a wide interest in economic policy at both a domestic and international level.

Randazzo is also managing director of the Pension Integrity Project, which provides technical assistance to public sector retirement system stakeholders who are seeking to prevent pension plan insolvency. His research focus on the national public sector pension crisis has a dual focus of identifying the systemic factors that cause public officials to underfund pension obligations as well as studying the processes by which meaningful pension reform can be accomplished. Within the Project he leads the analytics team that develops independent, third party actuarial analysis to stakeholders considering changes to public sector retirement systems.

In addition, Randazzo writes about the moral foundations of economic theory, and is currently developing research on the ways that the moral intuitions of economists influence their substantive findings on topics like income inequality, immigration, or labor policy.

Randazzo's work has been featured in The Wall Street Journal, Forbes, Barron's, Bloomberg View, The Washington Times, The Detroit News, Chicago Sun-Times, Orange-County Register, RealClearMarkets, Reason magazine and various other online and print publications.

During his tenure at Reason he has published substantive research on housing finance, financial services regulation, and various other aspects of economic policy at the federal level. And he has written regularly on labor economics, tax policy, privatization, and Turkish-U.S. political and economic issues.

Randazzo has also testified before numerous state and local legislative bodies on pension policy matters, as well as before the House Financial Services Committee on topics related to housing policy and government-sponsored enterprises.

He holds a multidisciplinary M.A. in behavioral political economy from New York University.

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