A Fed retrospective: Al Broaddus, until recently Chairman of the Richmond Federal Reserve Bank, tackles the bond market, inflation targeting, and Chinese capital flows. A TIE exclusive interview

International Economy, The,  Fall, 2004  

Tags: bond, exclusive interview, Federal Reserve Bank, Federal Reserve Board, inflation

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TIE: As long as Chairman Greenspan's healthy, why fix something that's not broken? There's always that loophole where Greenspan can continue to serve if President Bush doesn't nominate somebody new right way.

Broaddus: That's certainly true. The timing of replacing the Fed chair is not absolutely nailed down. The Administration could delay action if economic conditions are unsettled in early 2006. Or they could make an announcement sooner to reduce uncertainty and nervousness about the appointment. We'll just have to wait and see.

TIE: You're right. That's a good point. They could do it sooner.

Broaddus: For that very reason, President Bush reappointed Chairman Greenspan as Chairman last time far ahead of the deadline, and if markets seem to be getting a little antsy then they might move.

TIE: Thank you very much.

J. Alfred Broaddus, Jr., was Chairman of the Federal Reserve Bank of Richmond from 1993 to 2004.

The analytical apparatus for understanding how to communicate effectively is getting increased attention by our excellent staff at the Board and elsewhere in the System. Of course, having a Governor like Ben Bernanke who is at the cutting edge of this kind of research and knowledge is a great advantage. I'm optimistic that over time we will do a better job of conducting monetary policy in this environment.

--A. Broaddus

We currently have a great Chairman who has enormous crediblity throughout the country so right now inflation targets aren't needed so strongly. Obviously that situation can't persist forever. Going forward inflation targets would be a useful addition to our arsenal.

--A. Broaddus

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