Monetary Policy

A Public Letter of Concern about the Federal Reserve

Federal Reserve in Washington, D.C. (Kevin Lamarque/Reuters)

We the undersigned are deeply concerned about the changing role of the Federal Reserve. The Fed is among the nation’s most important institutions. Its monetary and regulatory mandates are essential for economic stability. However, based on recent activity, the Fed is in danger of exceeding these mandates. Unless it changes course, the Fed will impede its own effectiveness.

The coronavirus pandemic put enormous strains on the U.S. economy. An aggressive response by the Fed was entirely appropriate. But its direct credit allocation and growing interventions in non-economic-policy areas have no basis in central-banking best practices. These activities are the rightful domain of Congress, not the Fed.

Worryingly, the Fed’s behavior renders it increasingly sensitive to political interference. Partisan agendas have no place in determining the Fed’s policies. Yet this is precisely what the Fed’s current operations invite. We are beginning to see the signs of a politicized Fed, as it delves into areas such as environmental and social policy. These diversions weaken the Fed’s credibility and undermine its independence.

This is not a partisan issue. Our objections would be equally strong if the Fed involved itself in industrial policy or national security. All Americans benefit from a central bank devoted to effective monetary and regulatory policy. The Fed should refocus on its core missions.

Alexander William Salter — Comparative Economics Research Fellow, Free Market Institute and Associate Professor of Economics, Rawls College of Business, Texas Tech University

Co-signatories (Institutional affiliations for identification purposes only. Signatories current as of 15 June 2021.)

Zoltan Acs — Director, Center for Entrepreneurship and Public Policy; University Professor, Schar School of Policy and Government, George Mason University

Ray Ball — Sidney Davidson Distinguished Service Professor of Accounting, University of Chicago

James T. Bennett — William P. Snavely Chair of Political Economy, George Mason University

Sanjai Bhagat — Provost Professor of Finance, University of Colorado Boulder

Peter J. Boettke — University Professor of Economics and Philosophy, George Mason University

Edwin T. Burton — Professor of Economics, University of Virginia

William N. Butos — Emeritus Professor of Economics, Trinity College

Charles Calomiris — Henry Kaufman Professor of Financial Institutions, Columbia University

Rebel A. Cole — Lynn Eminent Scholar Chaired Professor of Finance, Florida Atlantic University

Bryan Cutsinger — Assistant Professor of Economics, Angelo State University

John A. Dove — Associate Professor of Economics, Troy University

William F. Ford — Former President, Federal Reserve Bank of Atlanta

J. D. Foster — Author, Economic Policy for Future Presidents

Diana Furchtgott-Roth — Former Acting Assistant Secretary for Economic Policy, United States Department of the Treasury; Adjunct Professor, George Washington University

Robin Grier — Professor of Economics, Free Market Institute, Texas Tech University

Gerald A. Hanweck Sr. — Professor of Finance, George Mason University

Stephen Happel — Emeritus Professor of Economics, Arizona State University

Joshua Hendrickson — Associate Professor of Economics, University of Mississippi

Thomas L. Hogan — Senior Research Fellow, American Institute for Economic Research

Peter Ireland — Member, Shadow Open Market Committee; Professor of Economics, Boston College

Barry Keating — Professor of Finance, University of Notre Dame

Paul Kupiec — Resident Scholar, American Enterprise Institute

Robert Lester — Associate Professor of Economics, Colby College

Stanley Liebowitz — Ashbel Smith Professor of Managerial Economics, University of Texas at Dallas

Richard Lowery — Associate Professor of Finance, University of Texas at Austin

Donald L. Luskin — Chief Executive Officer, Trend Macrolytics LLC

William J. Luther — Director, Sound Money Project, American Institute for Economic Research; Associate Professor of Economics, Florida Atlantic University

Ronald Mau — Assistant Professor of Economics, University of Mississippi

Jack Mintz — President’s Fellow, School of Public Policy, University of Calgary

William Peirce — Emeritus Professor of Economics, Case Western Reserve University

Pedro J. Piffaut — Chief Executive Officer, Langeron Econometrics

Alex J. Pollock — Former Principal Deputy Director, Office of Financial Research

United States Department of the Treasury; Distinguished Senior Fellow, R Street Institute

Mario J. Rizzo — Associate Professor of Economics, New York University

Steven Rosefielde — Professor of Economics, University of North Carolina at Chapel Hill

Anthony B. Sanders — Distinguished Professor of Finance, George Mason University

Dennis P. Sheehan — Emeritus Professor of Finance, Pennsylvania State University

Daniel J. Smith — Professor of Economics, Middle Tennessee State University

Michael Stutzer — Professor of Finance, University of Colorado Boulder

Richard Vedder — Distinguished Emeritus Professor of Economics, Ohio University

R. Christopher Whalen — Chairman, Whalen Global Advisors LLC

Robert M. Whaples — Hough Family Faculty Fellow and Professor of Economics, Wake Forest University

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