Mechanics of Finance: The Federal Reserve-Managing the Money Supply

January 14, 2014

Washington, D.C.


Jon Faust, Jim Glassman, Robin Harding and Komal Sri-Kumar
Milken Institute-National Press Foundation Mechanics of Finance Breakfast Briefing Series


Mechanics of Finance briefings are conducted for financial journalists to promote deeper understanding of financial markets

How does the Fed make monetary policy? This powerful institution, soon to have a new chairwoman, is arguably the most influential financial regulatory body in the world, yet its workings are a black box for most of us. The activities of the Central Bank affect interest rates on everything from credit cards to mortgages, the value of the U.S. dollar overseas and stock prices, with implications that touch every American. We'll look at the tools the Fed uses and how they work, including the federal funds rate, quantitative easing and more.


Jon Faust is special advisor to the Board of Governors of the Federal Reserve System. Additionally, he is the Louis J. Maccini Professor of Economics at Johns Hopkins University, and from 2008-2012 he was the director of its Center for Financial Economics. Previously he was assistant director at the Federal Reserve Board and visiting faculty at Princeton. Faust began his career at the Federal Reserve Bank of Kansas City as an economist and research assistant. His research focuses on macroeconomics, monetary policy, and econometrics and statistics, and his current research topics include work on forecasting, DSGE modeling, and financial stability. Faust is a member of the American Economic Association and the Econometric Society, and a research associate with the National Bureau of Economic Research. Faust received a B.S. from the University of Iowa, an M. Phil. in economics from Oxford University and a Ph.D. in economics from the University of California, Berkeley.

Jim Glassman is managing director and head economist for commercial banking at JP Morgan Chase & Co., where he provides market insights to help clients better understand the changing economy and its impact on their business ad provides financial analysis and research to the firm's corporate sector and its investment bank and government relations groups. Cited frequently in the media, Glassman is a participant in the Federal Reserve Bank of Philadelphia Survey of Professional Forecasters and the National Association of Business Economists' panel of macro-economic forecasters. From 1979 through 1988, Glassman served as a senior economist at the Federal Reserve Board in Washington, D.C. His responsibilities included analyzing and forecasting inflation and labor market developments, analyzing the Fed's operating strategies and interest rate markets, and developing monetary and reserves projections. Glassman holds a bachelor's degree from the University of Illinois, Champaign-Urbana, a master's degree in economics from the University of Illinois, Chicago and a Ph.D. in economics from Northwestern University.

Robin Harding is U.S. economics editor for the Financial Times, covering the U.S. Federal Reserve and the U.S. Treasury. Based in Washington, his beat includes U.S. economics, financial markets and business. Previously, Harding was Tokyo correspondent for the FT, where he covered the Bank of Japan and the country's technology sector. Prior to this, he served as a London-based economics leader writer. Before entering journalism, Harding worked in asset management and as a public policy researcher at the Social Market Foundation. He studied economics at Cambridge and also holds a master's degree in economics from Hitotsubashi University in Tokyo.

Komal Sri-Kumar, a senior fellow of the Milken Institute, is president of Santa Monica-based Sri-Kumar Global Strategies Inc., a macroeconomic consulting firm that advises multinational firms and sovereign wealth funds on global risk and opportunities. Before founding his own firm, he was group managing director and chief global strategist of The TCW Group Inc., where he was also the long-time chairman of the firm's Comprehensive Asset Allocation Committee. Prior to joining TCW, Sri-Kumar was senior vice president at Drexel Burnham Lambert and executive vice president of DBL Americas, responsible for country risk analysis. Previously, he was president of the Country Risk Consulting Service, which he founded to advise Big Eight accounting firms and investment and commercial banks on Latin American debt service capacity. Sri-Kumar holds a master's degree from the Delhi School of Economics and a master's and Ph.D. in economics from Columbia University.

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