Former Cleveland Fed Pres. Mester on the next Fed Chair: We need a thoughtful leader

Core Viewpoint - The next Federal Reserve chair should be a thoughtful leader focused on economic policy and the dual mandate goals, prioritizing analysis and clear communication to the public [2][3]. Group 1: Attributes of the Next Fed Chair - The ideal candidate should be able to lead the committee in considering the best path for policy to achieve economic goals, setting aside external pressures [2]. - Attributes of potential candidates include strong analytical skills, effective modeling, and forecasting capabilities [3]. Group 2: Criticism and Reform of the Fed - There is a growing mainstream criticism of the Federal Reserve, with calls for reform from some leading candidates [4]. - While acknowledging past mistakes, such as the delay in addressing inflation, there is a belief that improvements can be made without undermining the institution [5][8]. Group 3: Monetary Policy Considerations - The Fed should consider various scenarios and not rely solely on one approach, particularly in light of recent high inflation [6]. - There is a need for a balanced approach to monetary policy that considers the implications of lowering interest rates on inflation and small businesses [10]. Group 4: Transparency and Communication - A framework for how the Fed reacts to economic data should be established to improve transparency and predictability in policy decisions [11][12]. - Better communication regarding the Fed's reaction function is necessary to enhance understanding of its policy setting [13].