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