Richard H Clarida: The Federal Reserve's review of its monetary policy strategy, tools, and communication practices

Speech by Mr Richard H Clarida, Vice Chairman of the Board of Governors of the Federal Reserve System, at the2019 US Monetary Policy Forum, sponsored by the Initiative on Global Markets at the University of Chicago Booth School of Business, New York City, 22 February 2019.

The views expressed in this speech are those of the speaker and not the view of the BIS.

I am pleased to participate in this year's U.S. Monetary Policy Forum, which, since its inception, has brought together policymakers, academics, and market participants to share ideas and perspectives on U.S. monetary policy. Today I would like to discuss the broad review of the Federal Reserve's monetary policy framework that we are undertaking this year. We will examine the policy strategy, tools, and communication practices that we use to pursue our dual-mandate goals of maximum employment and price stability. In my remarks, I will describe the motivation for and scope of this review and will preview some of the events we are planning as part of it. The U.S. Monetary Policy Forum is an excellent venue for this presentation. For more than a decade, it has focused attention and timely analysis on critical issues confronting the Federal Open Market Committee (FOMC). Its programs have drawn on the latest economic research and considered a range of views. Similarly, the Federal Reserve's review of its monetary policy framework will be transparent, will be open minded, and will seek perspectives from a broad range of interested individuals and groups, including academics, other specialists, and the public at large.

Motivation for the Review

The fact that the System is conducting this review does not suggest that we are dissatisfied with the existing policy framework. Indeed, we believe our existing framework has served us well, helping us effectively achieve our statutorily assigned dual-mandate goals of maximum employment and price stability.