I’ve consistently advocated the following positions:
1. The Fed should focus on monetary policy and not get into credit allocation. They should focus on buying Treasuries, not other types of debt (unless they run out of Treasuries to purchase–which is not likely.)
2. The Fed should rely on policy rules, not discretion.
3. The Fed should do whatever it takes to hit its policy goals, including unlimited asset purchases and negative IOR, if necessary.
Here’s the FT on the newest pick for the Fed:
Mr Goodfriend was critical of aspects of the Fed’s quantitative easing policies, saying it should be wary of purchasing mortgage-backed securities, and has embraced the use of monetary policy rules to guide a central bank’s thinking.
But the economist, who is known as a free thinker, has not ruled out radical stimulus options. In 1999 he wrote that negative rates were a feasible option, years before central banks started experimenting with them. In 2015 he presented a paper on the subject of negative rates at the Fed’s Jackson Hole symposium in Wyoming.