A think tank report states that the Federal Reserve needs to improve its policy implementation and communication mechanisms.

According to ME News, on May 7 (UTC+8), a think tank comprised of current and former central bank policymakers stated that if the Federal Reserve hopes to withstand ongoing political attacks and maintain its independence, it needs to improve its monetary policy implementation and communication with investors and the public. This report, led by former New York Fed President Dudley, from the "Group of Thirty" (G-30), discussed some of the reform recommendations put forward by Warsh, a nominee for Fed Chair and also a G-30 member, and made eight recommendations, including: publishing a clear roadmap outlining when and how the Fed will use its balance sheet, the associated costs and benefits, and the risks and potential benefits of balance sheet reduction. The recommendations also include publishing more detailed staff forecasts and limiting forward guidance to periods when interest rates are near zero. The group also urged the Fed to more clearly define the responsibilities between the central bank and the U.S. Treasury, particularly regarding balance sheet policy and financial stability tools. The report also recommended external review of the Fed's policy framework and operations. The report also refuted Warsh's suggestion to limit Fed policymakers' communication through speeches and other channels. The organization made it clear that the Federal Reserve Chairman does not have the authority to make this change unilaterally, and that current external communication is an important tool for transparency. (Source: ME)