Think tank report says the Federal Reserve needs to improve policy implementation and communication mechanisms.

Golden Ten Data, May 7 – A think tank comprised of current and former central bank policymakers has stated that if the Federal Reserve hopes to withstand persistent political attacks and maintain its independence, it needs to improve the way it implements monetary policy and communicates with investors and the public. The "G-30" report, led by former New York Fed President Dudley, discusses some of the reform proposals put forward by Walsh, a Fed chair nominee and also a G-30 member, and offers eight recommendations. These include: publishing a clear roadmap indicating when and how the Federal Reserve will use its balance sheet, outlining related costs and benefits, as well as the risks and potential advantages of balance sheet reduction. The recommendations also include publicly releasing more detailed staff forecasts and confining the use of forward guidance to periods when interest rates are near zero. The organization also urges the Federal Reserve to more clearly delineate the responsibilities between the central bank and the U.S. Treasury, particularly regarding balance sheet policy and financial stability tools. Additionally, the report recommends an external review of the Fed's policy framework and operational methods. The report also rebuts Walsh's proposal to restrict Fed policymakers from communicating externally through speeches and other channels. The organization clearly states that the Fed chair does not have the authority to unilaterally make this change, and that current external communications are an important tool for transparency.