Mickey Levy on How to Reboot Fed Policy Ahead of its Upcoming Framework Review

Macro Musings with David Beckworth

Mickey Levy is Chief Economist for the Americas and Asia for Berenberg Capital Markets, a Wall Street veteran, and a longstanding member of the Shadow Open Market Committee. He and his co-author, Charles Plosser, also have a new paper out titled, *The Fed’s Strategic Approach to Monetary Policy Needs a Reboot.* Mickey joins David on Macro Musings to discuss this paper and its implications for the upcoming Federal Reserve framework review. David and Mickey also discuss the impact and importance of a flat Phillips curve, the Fed’s policy mistakes in the wake of its new flexible average inflation targeting (FAIT) framework, recommendations for how the central bank should approach the next framework review, and much more.

Transcript for this week’s episode.

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*The Fed’s Strategic Approach to Monetary Policy Needs a Reboot* by Mickey Levy and Charles Plosser

Timestamps:

(00:00:00) – Intro

(00:01:50) – Mickey Levy’s Career Path and Takeaways from the Most Recent Hoover Monetary Policy Conference

(00:07:24) – What Shaped the First Framework Review?

(00:11:56) – The Fed’s Addition of “Symmetric” Inflation

(00:16:32) – Price Level Drift, Deflationary Fears, and Inflation Expectations at the Fed

(00:23:33) – The Impact and Importance of a Flat Phillips Curve

(00:27:34) – Breaking Down the Elements of FAIT and the Fed’s Policy Mistakes

(00:42:11) – Recommendations for the Fed’s Upcoming Framework Review

(00:57:54) – Outro