Former Reserve Bank of India (RBI) governor Raghuram Rajan is set to play a role in shaping the future of US monetary policymaking after being appointed by the Federal Reserve to a high-level task force reviewing its policy framework. The appointment is part of five expert panels unveiled by newly appointed Federal reserve chairman Kevin Warsh to examine how the central bank conducts monetary policy.Rajan is among a distinguished group of economists, business leaders and former central bankers selected for the review. Delhi-born American economist Raj Chetty and Microsoft executive vice president and Xbox CEO Asha Sharma have also been named to separate task forces. The group also includes former Bank of England governor Mervyn King, former Walmart CEO Doug McMillon, Nobel laureate Thomas Sargent and Silicon Valley venture capitalist Marc Andreessen.

Rajan to examine balance sheet policy

Rajan will serve on the balance sheet policy task force alongside Harvard University economist Karen Dynan and former federal reserve governor Jeremy Stein.The panel has been tasked with examining the costs, benefits and institutional implications of the Federal Reserve’s current balance sheet regime, including its asset holdings and the role they play in implementing monetary policy.

Raj Chetty to co-lead data panel

Harvard University economist Raj Chetty will co-lead the data task force with former Walmart CEO Doug McMillon and University of Chicago economist Kevin Murphy.The group will focus on improving the quality and timeliness of real-world economic signals that inform the Federal Reserve’s policy decisions.Chetty is known for pioneering the use of large administrative and real-time datasets to study economic mobility, inequality and labour markets in the United States.

Asha Sharma joins AI and jobs review

Wisconsin-born Asha Sharma, executive vice president at Microsoft and CEO of Xbox, will serve on the productivity and jobs task force alongside venture capitalist Marc Andreessen and Stanford University economist Charles I Jones, who is currently on leave at Anthropic.The panel will assess the economic impact of emerging general-purpose technologies, including artificial intelligence, on productivity, employment and economic growth to inform the Federal Reserve’s policy judgments.

Other panels

The communications task force will review how the Federal Reserve conveys its policy deliberations and decisions during periods of uncertainty. It will be led by Peter R Fisher, professor of practice at the Foster School of Business, University of Washington; Arminio Fraga, founder and chairman of Gávea Investimentos and former president of the Central Bank of Brazil; and former Bank of England Governor Mervyn King.The inflation frameworks task force will revisit how the Federal Reserve understands and responds to the drivers of inflation. It will be led by Harvard University economist Greg Mankiw, Nobel laureate Thomas Sargent and former Bank for International Settlements adviser William White.

Five task forces to review Fed’s policy approach

Announcing the initiative, the Federal Reserve said the five task forces will examine areas central to the broad conduct of monetary policy.Chairman Kevin Warsh said, “The Federal Reserve’s commitment to price stability and maximum employment is unwavering. As is our resolve to pursue our mandate with rigor. The US economy has changed significantly over the last generation, and never more so than right now.”Commenting on the roles of each task force, Wash said, that the panel will “carefully consider whether policymakers’ means and methods, analytical tools and policy approaches can be improved upon. I am honored that the best minds from a range of disciplines have agreed to work with us to sharpen our performance as an institution. The goal is straightforward: to ensure the Fed is best positioned to achieve our objectives in this consequential time.“The task forces will be co-led by external advisers comprising economists, business leaders and former central bank practitioners with deep expertise in their respective fields. Supported by Federal Reserve staff, they will operate independently with a mandate to follow the evidence, provide candid feedback and produce rigorous findings for the Federal Open Market Committee.