Issue 6, November/December 2008
Federal Reserve Bank of Dallas

President's Perspective

Policymaking is the part of a Federal Reserve Bank president’s job that garners the most attention from the likes of Bloomberg reporters and Wall Street Journal editors.

Every six weeks, I travel to Washington to attend the Federal Open Market Committee meeting with the seven Federal Reserve System governors and 11 other regional Bank presidents; on occasion, we confer between scheduled meetings by videoconference. After lengthy discussion and debate, this committee sets the monetary policy necessary to deliver on the Fed’s mandate of sustainable, noninflationary employment growth.

In addition to performing these headline duties, each president serves as chief executive officer of a key piece of our nation’s financial infrastructure. Each regional Fed acts as a banker’s bank that supplies billions of dollars in credit to depository institutions and provides vital financial services such as check processing and currency and coin circulation.

We also supervise and regulate banks and bank holding companies in the region to support a safe and sound banking system. And we conduct and publish research on international, national and regional economies. To support all these activities, we run significant back-office operations that heavily depend on the most advanced IT systems and a superbly trained professional workforce.

What is often left out of the formal job description is what I consider one of a Fed Bank president’s most important roles—that of educator. In speeches, interviews and publications, Fed officials have an implicit responsibility to explain our views and actions to help demystify the whys and wherefores of the Fed.

Fed presidents take this part of the job very seriously because every word we utter in public is parsed for hidden meaning about policy or the economy. We do not want to send the wrong signals. In writing speeches or preparing for interviews, I carefully consider the ideas I want to convey. I consult with teams of economists and researchers to fine-tune and perfect the message, checking and rechecking numbers, quotes and arguments along the way. I then do my level best to communicate in terms that are understandable to the public.

I do all of this because I appreciate the power of information and its ability to educate, to motivate and to reassure. And in times like these, I think we could all use a little reassurance. In this issue’s “On the Record,”  I answer questions about the financial system as we see it today. Hopefully, readers will find it informative and, perhaps, reassuring.

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About Southwest Economy Southwest Economy is published six times annually by the Federal Reserve Bank of Dallas. The views expressed are those of the authors and should not be attributed to the Federal Reserve Bank of Dallas or the Federal Reserve System. Articles may be reprinted on the condition that the source is credited and a copy is provided to the Research Department of the Federal Reserve Bank of Dallas. Southwest Economy is available free of charge by writing the Public Affairs Department, Federal Reserve Bank of Dallas, P.O. Box 655906, Dallas, TX 75265-5906, or by telephoning (214) 922-5254.