3 days ago

Kevin Warsh Criticizes Fed's Forward Guidance

Kevin Warsh Criticizes Fed's Forward Guidance
Kevin Warsh tries being a normal central banker · livemint.com

Kevin Warsh, a former official from the Federal Reserve, gave a speech where he talked about how the Fed should be more careful with its promises about future interest rates.

He doesn't like the idea of 'forward guidance,' which is when the Fed tells everyone what it plans to do in the future.

He thinks this idea, which started after the big financial crisis in 2007-09, has stayed around too long and isn't very useful.

Instead, he believes the Fed should be more humble and not make such firm promises.

He also talked about how the Fed is thinking about artificial intelligence and how it might affect jobs.

Key facts

Speaker
Kevin Warsh
Organization
Federal Reserve (Fed)
Main Topic
Forward Guidance
Criticism
Overstayed its welcome
Alternative Approach
Humble, less committed decisions

Quotes

Kevin Warsh

Federal Reserve policymaker discussing artificial intelligence and monetary policy.

“works better in theory than in practice, better in the lab than in the field”
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“Will token usage be complementary or competitive to labour?”
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Sources

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