Commentary - Money, Banking and Financial Markets

“[FIMA] was not designed to stabilize Treasury borrowing rates by accommodating foreign authorities' exchange rate management operations, absent immediate financial stability threats.”

We have written seven posts that address Chair Warsh's five task forces.

“You can see the computer age everywhere but in the productivity statistics.”

"Among the projects that the economics profession, and … the Fed needs to do, is to try to use our new understanding and new data sources to see what’s really the inflation rate in the economy."

"I think the data that's being used to judge inflation is quite imperfect data….

“The last task force, the one on inflation frameworks, that’ll examine the drivers of inflation, first principles, and weigh the full range of ideas for delivering price stability in a changing economy.”

On 17 June, Federal Reserve Chair Kevin Warsh established five task forces to reconsider how the Fed operates.

“Unlike many of my colleagues past and present, I don’t believe in forward guidance.

“The monetary system with the central bank at its centre has served society well. […] Private sector innovation benefits society precisely because it is built on the strong foundations of the central bank.”

“The one thing that’s missing, but that will soon be developed, is a reliable e-cash, a method whereby on the Internet you can transfer funds from A to B without A knowing B or B knowing A. […] Of course, it has its negative side.

“The safety and soundness of the banking system is built on trust, and I fear we are eroding that trust.”

“[T]he constraint of having sufficient reserve balances to make timely outgoing payments throughout the day without relying on funding from the Fed can suddenly have a high and volatile shadow price, disrupting the Fed’s target of market interest rates.

"In my judgment, we should be shrinking the central bank balance sheet, taking the Fed out of these markets unless and until there's a crisis.”

The following post – co-authored with our friend and colleague, Richard Berner (NYU Stern School of Business) – was submitted in August 2025 as a comment to the U.S. bank regulatory agencies regarding their proposed modifications to the leverage ratio sta…

As most readers of this blog know, the Federal Reserve is an idiosyncratic mix of public and private.

Our new CEPR Policy Insight examines how three key technological innovations—blockchains, distributed ledgers, and tokenization—could reshape the future of finance.

Since January 2025, the U.S.

We co-authored this piece with Jeremy Kress, Associate Professor of Business Law at the University of Michigan’s Ross School of Business and Director of the University’s Center on Finance, Law and Policy.

“[Net] claims against residents of the United States cannot continue to increase forever in international portfolios at their recent pace. […] At some point, diversification considerations will slow and possibly limit the desire of investors to add dollar…

“When the world gets riskier, people put their money into dollars […] that’s the American pattern….