Sept. 13 (Bloomberg) -- Morgan Stanley, owner of the world’s biggest brokerage, hired former Federal Reserve senior staffer Vincent Reinhart as chief U.S. economist.
Reinhart, 54, was previously a resident scholar at the American Enterprise Institute in Washington, New York-based Morgan Stanley said today in a statement. His positions at the Fed from 1990 to 2007 included secretary and economist of the Federal Open Market Committee, according to the statement. He was the Fed’s chief monetary-policy strategist from 2001 until 2007.
Reinhart’s team will include David Greenlaw, U.S. fixed-income economist and managing director at Morgan Stanley, the sixth-largest U.S. bank by assets, according to the statement. Reinhart, who will be based in New York, is scheduled to start on Oct. 1.
“We’re going to emphasize the optionality in forecasts,” Reinhart said today in an interview on Bloomberg Radio. “Point forecasts don’t help investors today, you’ve got to give them a central tendency and alternatives. That’s exactly how we handle monetary policy alternatives.”
In an editorial for Bloomberg View last month, Reinhart criticized the “sorry spectacle” of the U.S. debt-ceiling debate, and said the Fed should directly tie accommodative monetary policy, including low interest rates and asset purchases, to its forecasts for economic growth so that market participants may have more clarity on the central bank’s future path.
“Vincent has been an important voice in global economic debates for years,” Ted Pick, global head of equities at Morgan Stanley, said in the statement. “He complements a talented global team of economists and strategists at the firm.”
Reinhart is replacing Richard Berner, who left Morgan Stanley earlier this year after 12 years at the firm and joined the U.S. Treasury Department to help build the new Office of Financial Research.
Reinhart received master of philosophy and master of arts degrees in economics from Columbia University after earning his bachelor’s degree from Fordham University.
In an editorial that appeared in the Washington Post in May 2008, Reinhart wrote that the Fed’s decision to step in and lend to collapsing investment bank Bear Stearns Cos. in March of that year would change market expectations for the government’s involvement in financial crises.
“What will happen the next time top officers of key investment banks are thrown together to discuss a failing institution?” Reinhart asked. “Those titans of finance, not a charitable lot by profession, will no doubt ask: Where is the government’s contribution?”
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