Fed’s Warsh taps economists and bankers to oversee U.S. central bank task forces
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- Kevin Warsh on Thursday named 15 economists and former central bankers to lead five task forces reviewing Fed operations, announced after his first policy meeting press conference on June 16-17.
- The task forces cover data, inflation, productivity and jobs, communications, and balance sheet management, with Harvard's Raj Chetty co-leading the data panel, Marc Andreessen among three co-leads of productivity, and Greg Mankiw co-leading the inflation task force.
- Thomas Sargent, a Nobel economics laureate and NYU professor, will join the inflation panel alongside Mankiw, and former central bank heads of Brazil, England, and India are among the 15 appointees spanning the policy spectrum.
- The task forces will use Fed staff but operate independently to produce rigorous findings for the Federal Open Market Committee, with Warsh hoping to receive recommendations by the end of the year.
- Warsh, a Fed governor from 2006-2011, had grown critical of the central bank's monetary policy approach and its multi-trillion-dollar balance sheet before his nomination by President Donald Trump, and has pushed for 'real-time' data and attention to AI's influence on productivity.
- The outside-expert approach contrasts with recent Fed reviews driven more by internal analysis, though the Fed did not define what role its seven governors and 12 regional Reserve Bank presidents will play in the task force process.
Why it matters: Warsh is replacing past internal Fed self-assessments with an outside-expert review covering AI, real-time data, and the multi-trillion-dollar balance sheet — areas where he had publicly broken with prior Fed practice. Any fundamental changes from these five task forces still require consensus among the Fed's seven governors and 12 regional bank presidents, whose role in the process remains undefined.
