Roberto Perli is the manager of the System Open Market Account (SOMA) and a senior leader in the New York Fed’s Markets Group. In his role, Roberto is responsible for implementing monetary policy at the direction of the Federal Open Market Committee (FOMC). Roberto is also a returning guest to the podcast, and he rejoins Macro Musings to talk about a recent speech he made titled, *Balance Sheet Reduction: Progress to Date and a Look Ahead.* Specifically, David and Roberto discuss the Fed’s recent balance sheet activities, the basics and functionality of the overnight reverse repo facility, the importance of slowing down the Fed’s balance sheet runoff, and much more.

Transcript for this week’s episode.

Roberto’s NY Fed profile

Roberto’s Twitter: @R_Perli

David Beckworth’s Twitter: @DavidBeckworth

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*Balance Sheet Reduction: Progress to Date and a Look Ahead* - Remarks by Roberto Perli at the 2024 Annual Primary Dealer Meeting, Federal Reserve Bank of New York

Timestamps:

(00:00:00) – Intro

(00:04:49) – Breaking Down the Role of SOMA Manager

(00:08:43) – Recapping the Fed’s Balance Sheet Activities

(00:11:04) – How to Think About Quantitative Tightening

(00:13:19) – Breaking Down the Overnight Reverse Repo Facility

(00:20:42) – Slowing Down the Runoff and the Future of QT

(00:26:48) – How to Determine the Critical Level of Reserves

(00:33:03) – The Structural Demand for Bank Reserves Over Time

(00:38:55) – The Advantages of the Floor Operating System

(00:47:49) – Reserve Supply Focus Moving Forward

(00:49:44) – Outro

Mary Daly is the president and CEO of the Federal Reserve Bank of San Francisco, a voting member of the Federal Open Market Committee (FOMC), and is also a 28-year veteran of the Federal Reserve System. President Daly joins David for this special live episode of Macro Musings to talk about her non-linear career path to the world of monetary policy, the long-term economic impacts of AI, the future outlook for Fed policy and the Fed’s framework, and much more.

Transcript for this week’s episode.

Mary’s Twitter: @MaryDalyEcon

Mary’s San Francisco Fed profile

David Beckworth’s Twitter: @DavidBeckworth

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*Facts, Fears, and Functionality of NGDP Level Targeting* by David Beckworth

Timestamps:

(00:00:00) – Intro

(00:01:30) – Mary Daly’s Background

(00:06:09) – Recent Inflationary Trends and the Future of Fed Policy

(00:15:39) – The Trajectory of R-Star Over the Medium to Long-Run

(00:19:06) – The Long-Term Economic Impacts of AI

(00:29:51) – Expectations for the Upcoming Fed Framework Review

(00:33:35) – Prospects for Nominal GDP Targeting at the Fed

(00:36:58) – Fed Policymaking During an Election Year

(00:38:16) – Audience Q&A Period

(01:01:09) – Outro

Dan Katz and Stephen Miran are former senior advisors for the US Treasury Department and are currently adjunct fellows at the Manhattan Institute. Dan and Stephen have also written a new paper titled, *Reform the Federal Reserve’s Governance to Deliver Better Monetary Outcomes,* and they join Macro Musings to talk about this paper and the proposed reforms for the Federal Reserve outlined in it. Specifically, Dan, Steve, and David discuss the ever-expanding reach of the Fed, its role as debt manager and bank regulator, the current issue with the central bank’s personnel, and a lot more.

Transcript for this week’s episode.

Stephen’s Twitter: @SteveMiran

Stephen’s Manhattan Institute profile

Dan’s Twitter: @DanielScottKatz

Dan’s Manhattan Institute profile

David Beckworth’s Twitter: @DavidBeckworth

Follow us on Twitter: @Macro_Musings

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Related Links:

*Reform the Federal Reserve’s Governance to Deliver Better Monetary Outcomes* by Dan Katz and Stephen Miran

Timestamps:

(00:00:00) – Intro

(00:04:20) – The Fed’s Issue of Picking Winners and Losers

(00:09:17) – The Fed’s Role as Bank Regulator

(00:12:53) – The Ever-Expanding Reach of the Fed

(00:17:50) – The Fed as a Debt Manager

(00:23:33) – What Should the Fed Do in a Zero Lower Bound Environment

(00:27:26) – Personnel is Policy: The Issue with Fed Personnel

(00:29:55) – Options for Personnel Reform at the Fed

(00:38:22) – Making the Fed President Selection Process More Robust

(00:47:28) – The Nature of Debate at the Fed

(00:50:53) – The Scope for Change at the Fed

(00:53:21) – Outro