Richmond Fed tries to bridge gap between rules and discretion

The Federal Reserve Bank of Richmond has lent support to the idea of setting monetary policy on the basis of a more transparent strategy, with a senior economist outlining a framework that steers between rules- and discretion-based approaches.

The Richmond Fed published a paper by Robert Hetzel on September 12, outlining a method for the Fed to be more explicit and systematic in setting policy, without ceding control completely to a mechanical rule.

Hetzel's idea is for the Federal Open Market