Former RBI Governor Raghuram Rajan Among 3 Indian-Origin Experts Named To Key US Fed Task Forces

Washington, July 16: The US Federal Reserve has appointed former Reserve Bank of India (RBI) Governor Raghuram Rajan and two other Indian-origin experts to key task forces that will review the central bank's policies and functioning.

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The appointments are part of a wider reform programme launched by newly appointed Federal Reserve Chair Kevin Warsh after years of elevated inflation in the United States.

Joining Rajan are Delhi-born American economist Raj Chetty and Microsoft executive Asha Sharma. The three will contribute to separate task forces focused on strengthening different areas of the Federal Reserve's policymaking process. The panels also include several globally recognised economists, business leaders and policy experts.

Fresh Push For Policy Review

Warsh announced five task forces that will examine communications, balance sheet policy, the use of economic data, productivity and jobs, and the inflation framework.

According to him, the exercise is aimed at bringing fresh ideas into the Federal Reserve and improving its decision-making process after inflation remained above the central bank's target for more than five years.

"I am honoured 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," Warsh said on Thursday.

He later told senators that the purpose of the initiative is to improve monetary policy decisions and move beyond the years of high inflation. Warsh also said he personally reached out to 15 experts with diverse viewpoints to encourage greater transparency and new thinking within the institution.

Indian-Origin Experts Get Key Roles

According to a PTI report, Rajan will serve on the balance sheet policy task force alongside Harvard economist Karen Dynan and former Federal Reserve Governor Jeremy Stein.

The panel will study the costs, benefits and institutional implications of the Federal Reserve's current balance sheet, including its asset holdings and their role in implementing monetary policy.

Rajan served as RBI Governor from 2013 to 2016 and is widely recognised for his work on financial stability and monetary policy. Before leading India's central bank, he was the Chief Economist and Director of Research at the International Monetary Fund.

His appointment comes as the Federal Reserve reviews its monetary policy framework following the pandemic-era expansion of its nearly $9 trillion balance sheet and its subsequent efforts to reduce it while bringing inflation closer to its long-term target.

Raj Chetty, a Harvard University economist, 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 economic data used by the Federal Reserve in policymaking. Chetty is known for his work using large administrative and real-time datasets to study economic mobility, inequality and labour markets in the US.

Asha Sharma, Executive Vice President at Microsoft and CEO of Xbox, will join the Productivity and Jobs task force alongside venture capitalist Marc Andreessen and Stanford economist Charles I. Jones. The panel will assess how emerging technologies, including artificial intelligence, are likely to influence productivity, employment and economic growth.

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Raghuram Rajan, Raj Chetty Among Experts Leading US Fed Policy Review Panels

The five task forces also include former Bank of England Governor Mervyn King, Nobel laureate Thomas Sargent and several other leading economists and industry figures. The appointments reflect the Federal Reserve's attempt to bring together expertise from academia, business and technology as it reassesses the future direction of US monetary policy.

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