Hoenig Says He Changed Jackson Hole Guest List to Discourage `Group Think'
Thomas Hoenig, of the Federal Reserve Bank of Kansas City
Brendan Hoffman/Bloomberg
Thomas Hoenig, president of the Federal Reserve Bank of Kansas City.
Thomas Hoenig, president of the Federal Reserve Bank of Kansas City. Photographer: Brendan Hoffman/Bloomberg
Kansas City Federal Reserve President Thomas Hoenig said he cut back invitations to Fed officials to the Jackson Hole symposium this year to broaden debate and discourage uniform thinking on monetary policy.
“We are trying to avoid the same group so that we get this group think that people can attribute if you only talk to the same people over and over,” Hoenig said in an interview broadcast today on Bloomberg Radio’s “The Hays Advantage,” with Kathleen Hays.
The Kansas City Fed this year invited the other 11 Fed banks to send either the president or research director, not both officials like past years. More international central bankers are coming instead, Hoenig said. The Fed official’s call for more policy perspectives reflects his voting record: Hoenig has been the sole dissenter on policy this year, dissenting five times, including most recently on Aug. 10.
“You don’t get good outcomes unless there is a broad diversity of views, discussion, debate,” said Hoenig, who took office in 1991 and is the Fed’s longest-serving policy maker. The debate should be one “where you can have differences respectfully and graciously of each other and hopefully come to better conclusions,” Hoenig said. That is my goal.”
Hoenig Dissented
Hoenig dissented this month from the Fed’s decision to keep its bond holdings at $2.05 trillion by reinvesting about $15 billion to $20 billion a month in maturing mortgage-backed securities to support a slowing economic recovery. The Federal Open Market Committee held the main interest rate unchanged at zero to 0.25 percent, where it’s been since December 2008, and affirmed a pledge to keep rates low for “an extended period.”
Hoenig, who has objected to the Fed’s extended-period pledge, said he still expects the U.S. economy to expand by about 3 percent this year, in line with his forecast from a month ago.
“I have long said the recovery would be modest,” he said. “My views haven’t changed. It will be modest. I think people have to realize that. We are going through major adjustments.”
Economists have downgraded their forecasts for the second half of this year. Gross domestic product will expand at an average 2.55 percent annual rate in the last six months of 2010, according to the median of 67 estimates in a Bloomberg News survey taken July 31 to Aug. 9, down from the 2.8 percent pace projected last month.
A report Aug. 6 showed U.S. private employers added 71,000 jobs in July, below the 90,000 median estimate of economists surveyed by Bloomberg News. The unemployment rate was unchanged at 9.5 percent. Including government workers, the U.S. lost 131,000 jobs in July, compared with the median economist estimate of 65,000.
To contact the reporters on this story: Steve Matthews in Atlanta at smatthews@bloomberg.net; Kathleen Hays in New York Khays4@bloomberg.net.
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