In an article dated April 7, 2012, it stated that Brian Sack, a key trader with the Federal Reserve Bank of New York, has resigned his post. Per the article:
| Brian Sack |
One of the key stewards of the Federal Reserve's unconventional monetary stimulus is parting ways with the central bank, a move that stunned Wall Street and left large shoes to fill in its all-important market trading section. Brian Sack, head of the markets group at the Federal Reserve Bank of New York, has tendered his resignation, according to a release Thursday from the New York Fed. Sack, 41, will stay in his current post until June 29, when the Fed's latest monetary stimulus program, known as Operation Twist, is set to expire. He will then be placed on leave until Sept. 14, during which he will have limited contact with the bank, the release said.
The departure comes as debate grows over the future of the ultra-easy monetary policy pursued by the Fed since the 2008-09 financial crisis. Investors and bond dealers are now intently questioning whether the Fed is prepared to embark on a third bond-buying program to boost the economy or is preparing for an eventual unwinding of those policies to tighten monetary conditions. With the economy improving, the question remains whether growth can remain sufficiently healthy without further monetary support while threats to the economic and investment climate continue from sources such as the euro zone's sovereign debt crisis.
"I'm dumbfounded," said Raymond Stone, co-founder of Stone & McCarthy Research Associates, which closely tracks Fed policy. "He laid the groundwork for a lot of things the Fed has done and communicated clearly to the market. He did an excellent job in a difficult environment."Per our reading in Chapters 9, 10 and 11 in the Rittenberg/Tregarthen Macroeconomics Book, The Federal Reserve serves as the US Central Bank and is the main agent of Monetary Policy. The New York Federal Reserve has a permanent seat on the Federal Reserve Open Market Committee, which is in charge of conducting open market operations.
Questions for Discussion:
1. What is the goal of Easy Monetary Policy? Why has the Federal Reserve been enacting it since 2008/2009? Has it been successful? Why or Why not?
2. What are open market operations? How are they done in easy mode of Monetary Policy? How to they affect interest rates, total spending the overall economy?
3. Why does the New York Federal Reserve have a permanent seat on the Open Market Committee? How does this change in a Key Bond Trader potentially impact Open Market Operations?
As always, thoughtful comments and questions are welcomed.
Success to you all!
Prof. Hank Lewis
