G30 report calls for changes to Federal Reserve's communication, execution of monetary policy to buttress independence

The Group of Thirty (G30) published "The Federal Reserve’s Monetary Policy Framework: More to Do to Buttress Independence" chaired by William C. Dudley.

WASHINGTON, DC, UNITED STATES, May 7, 2026 /EINPresswire.com/ -- The Group of Thirty (G30) today published "The Federal Reserve’s Monetary Policy Framework: More to Do to Buttress Independence." The study, chaired by William C. Dudley, Chair of the Bretton Woods Committee and Former President of the Federal Reserve Bank of New York, examines recent changes to the Federal Reserve’s monetary policy framework as part of the 2025 review. The report reviews both the important adjustments that were made as a result of the review and what remains to be done to enhance the Fed’s framework, improve its communication and transparency, and clarify its role and responsibilities.

Central Bank independence promotes positive long-term economic outcomes and drives lower inflation by allowing policymakers to resist short sighted political pressure. Independence must be maintained through active accountability, credibility, and public trust. The report argues the Federal Reserve must preserve its independence through strengthening its existing monetary policy framework, bettering communication, and providing institutional clarity. The 2025 Monetary Policy Framework review process resulted in the Federal Reserve taking on some important changes, most notably the return to a symmetric inflation target of 2 percent, moving away from the flexible average inflation targeting (FAIT) regime. However, there is more to be done.

The report offers key recommendations including creating a clear, comprehensive framework for quantitative easing and tightening including when to use them, how to assess costs and benefits, and how to exit. It suggested the Fed carefully reassess the size and structure of its balance sheet and consider the impacts of shrinking its overall size. On transparency, the Fed should consider publishing detailed staff forecasts and better linking economic projections to the policy decisions taken. The report urges limiting forward guidance to periods when interest rates are near zero, streamlining public communication to avoid confusion, and more clearly defining the roles of the Fed and the U.S. Treasury, especially regarding balance sheet policies and financial stability tools. Finally, the Federal Reserve should conduct an external review of its policy framework and operations.

William C. Dudley, Chair of the G30 Working Group on the Federal Reserve Monetary Policy Framework, stated: “The independence of the Federal Reserve with respect to the conduct of monetary policy is a necessary condition for the Fed’s ability to achieve its employment and inflation objectives. But it is not sufficient. How the Federal Reserve communicates about and implements monetary policy also plays an important role.” He added: “This report makes eight recommendations for how the Federal Reserve could improve its communication and execution of monetary policy to bolster its credibility and buttress its independence.”

William Dudley authored the report and chaired the G30 Working Group on the Federal Reserve Monetary Policy Framework which included Working Group Members Mohamed El-Erian, Jacob Frenkel, Mervyn King, Guillermo Ortiz, Masaaki Shirakawa, and Yi Gang. We extend our gratitude to the Working Group members for their support, input, and dedication throughout the project.

To receive a copy of The Federal Reserve’s Monetary Policy Framework: More to Do to Buttress Independence, please contact the G30 Press Officer Melissa Golding at +1 571-236-2820 or goldingm@group30.org.

On May 7, 2026, at 9:00AM EDT, the G30 hosted a live webinar discussion of the report with William Dudley, Mervyn King, and Masaaki Shirakawa. A link to the event recording is available at www.youtube.com/groupofthirty.

The Group of Thirty is an independent global body comprised of economic and financial leaders from the public and private sectors and academia. It aims to deepen understanding of global economic and financial issues, to explore the international repercussions of decisions taken in the public and private sectors, and to examine the choices available to policymakers and market practitioners. The Group was established in 1978. The Chair of the Board of Trustees is Tharman Shanmugaratnam and the Chair of the Group is Raghuram G. Rajan. More information and membership bios are available at www.group30.org.

Desiree Maruca
Group of Thirty
+18475259084 ext.
info@group30.org
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