Renee Courtois Haltom

Should the Fed Have a Financial Stability Mandate? Lessons from the Fed's First 100 Years

President Jeffrey Lacker and Research Publications Content Manager Renee Haltom explore the Feds role in financial stability. Following the global financial crisis of 2007-08, the Fed has been given enhanced regulatory responsibilities to prevent future crises. However, most of the Feds actions in pursuit of financial stability have historically come through emergency lending once crises are underway. The authors conclude that arguments in favor of emergency lending are based on erroneous readings of history. Instead, emergency lending may undermine financial stability, as well as the Feds core mission of providing monetary stability.

Unsustainable Fiscal Policy: Implications for Monetary Policy

Federal government debt held by the public reached 67.7 percent of gross domestic product in 2011 and trends point to large budget deficits for many years to come. In this essay, Renee Haltom and John Weinberg explore the implications for monetary policy if the United States ever approached its fiscal limit. In that scenario, the Federal Reserve might face pressure to produce inflation revenue. The authors conclude that the United States must avoid this scenario by placing fiscal policy on a more sustainable path.