For many Americans, the Federal Reserve is draped in a cloak of academia.
Since the late 1970s, a studied economist has led the central bank. Some have been more professorial than others, but one key role they all have played is that of educator-in-chief on the U.S. economy. Most Americans, and some federal lawmakers, are not be interested in esoteric talk of yield curves, consumer expenditures and bank capital analysis, so it's become increasingly prudent for Fed officials to speak clearly.
By virtue of the bank's central position and its growing influence, the chairman of the Federal Reserve could also be considered the first responder to the American economy. We witnessed this during the Great Recession, when the Fed aggressively cut interest rates and took extraordinary, and controversial, steps to intervene in the financial system. The reputation of the modern Fed as an economic fixer dates back to the early 1980s, when then-Chairman Paul Volker undertook a strategy to squeeze out high inflation, helping unleash the economic boom that followed.
On Thursday in the week ahead, current Chair Janet Yellen will hold an unprecedented internet town hall for teachers. It is a return to her roots. Before heading the Fed, Yellen was an economics professor.
With the economy having played such a pivot role in the recent election, Yellen has an opportunity to speak plainly about the Fed's monetary mission to provide the U.S. with a stable and flexible financial system.
While barely half of American households own stock, all Americans have a financial stake in better understanding our economy and holding policymakers and politicians accountable for their decisions.
