Principal Adviser to the League: Hope for Federal Reserve Chairman Walsh to focus on long-term structural issues

“FOR THE FIRST JACKSON HALL KEYNOTE SPEECH IN HER TENURE, FEDERAL RESERVE CHAIRMAN WALSH IS ABOUT TO BE DELIVERED. AT THIS IMPORTANT TIME, HE FACES A DELICATE CHALLENGE: HOW TO RESPOND TO THE HIGH AND DIVERSE EXPECTATIONS OF MARKETS AND COMMUNITIES. ON THE ONE HAND, IT WAS HOPED THAT HE WOULD CONTINUE THE TRADITION OF SUCCESSIVE FED PRESIDENTS AND, WHILE PROVIDING FORWARD-LOOKING GUIDANCE, ELABORATE ON HIS CURRENT POLICY RESPONSE MECHANISM, NAMELY, HOW THE FED WOULD MAKE POLICY DECISIONS IN THE FACE OF ECONOMIC DATA AND CHANGING CIRCUMSTANCES. ON THE OTHER HAND, THERE WAS A DESIRE TO RETURN TO THE INITIAL LONG-TERM STRATEGIC POSITIONING OF THIS UNIQUE MEETING. THIS MEANS THAT, IN THE CONTEXT OF SCIENCE, TECHNOLOGY, INNOVATION AND GEO-ECONOMIC CO-MOBILIZATION OF DEEP STRUCTURAL CHANGE, MORE ATTENTION IS BEING PAID TO THE GROWING AND INCREASINGLY COMPLEX DOMESTIC ECONOMIC AND POLICY ISSUES IN THE UNITED STATES. BALANCING THESE TWO EXPECTATIONS IS NOT EASY. NOT ONLY IS THIS BALANCE DIFFICULT TO GRASP, IT IS ALSO ALMOST DOOMED TO FAIL TO SATISFY EVERYONE. AT THE SAME TIME, POLICY FACTORS OUTSIDE THE FED FURTHER COMPLICATED DECISION-MAKING. HOWEVER, IT IS ALSO BOUND TO PROVIDE AN IMPORTANT WINDOW FOR THE MARKET TO UNDERSTAND THE POLICY PHILOSOPHY AND LEADERSHIP STYLE OF THE NEW FED CHAIRMAN. PERSONALLY, I WOULD PREFER HIS SPEECH TO FOCUS MORE ON LONG-TERM STRUCTURAL ISSUES, ESPECIALLY AS THERE IS STILL A CLEAR DISAGREEMENT WITHIN FOMC.”