Think tank report states the Federal Reserve needs to improve policy implementation and communication mechanisms

ME News Report, May 7 (UTC+8), a think tank composed of current and former central bank policymakers stated that if the Federal Reserve wants to resist ongoing political attacks and maintain its independence, it needs to improve its monetary policy implementation and communication with investors and the public. This “Thirty People Group” (G-30) report, led by former New York Fed President Dudley, discusses reform suggestions proposed by Wosh, a G-30 member and nominee for Fed Chair, and offers eight recommendations, including: publishing a clear roadmap explaining when and how the Fed will use its balance sheet, related costs and benefits, and the risks and potential advantages of balance sheet reduction. The suggestions also include releasing more detailed staff forecasts and limiting forward guidance to periods when interest rates are near zero. The organization also urges the Fed to more clearly delineate responsibilities between the central bank and the U.S. Treasury, especially regarding balance sheet policies and financial stability tools. Additionally, the report recommends external reviews of the Fed’s policy framework and operations. The report also refutes Wosh’s proposal to restrict Fed policymakers from communicating externally through speeches and other channels. The organization explicitly states that the Fed Chair does not have the authority to unilaterally make such changes, and that current external communication is an important tool for transparency. (Source: Jin10)