NICK DIFRANCESCO (ND): I think our readers would be interested to know what life is like as a voting member of the Federal Reserve System’s Federal Open Market Committee (FOMC). Can you share some personal perspectives on your responsibilities and what it’s like to have your words so carefully scrutinized in the media?
SANDRA PIANALTO (SP): It has been both a privilege and a humbling experience to serve as a Federal Reserve policymaker during these extremely challenging times. As president of the Cleveland Federal Reserve Bank, I have a vote on the FOMC every other year, but I go to the meetings equally prepared whether I am voting or not. At each meeting I share my view of the outlook for growth, unemployment, and inflation. My outlook is informed by economic models and information from my business and banking contacts across Ohio, Pennsylvania, Kentucky, and West Virginia. At the FOMC meetings, I also listen to my colleagues’ views on the outlook. The financial crisis and recession have really reinforced the importance of keeping an open mind, of looking at each situation pragmatically, and forming policy recommendations around the developing outlook.
As far as media scrutiny, that goes with the job. I recognize that monetary policy is most effective when the public understands why the FOMC is taking a particular action. We are now in a period of heightened uncertainty about the economic outlook; consequently, there is increased interest in Federal Reserve policies.
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