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 groupthink that people can attribute if you only talk to the same people over and over,” Hoenig said in an interview broadcast Thursday 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 their president or research director, not both officials as in past years. Instead, more international central bankers are coming, 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 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 policymaker. The debate should be one “where you can have differences respectfully and graciously of each other and hopefully come to better conclusions. That is my goal.”
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.
