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Unconventional
A Policymaker’s
Reflections on Crisis
to Recovery
A N N UA L RE P O R T 2 017

Table of Contents
Chair’s Message

President’s Message

Unconventional: A Policymaker’s Reflections
on Crisis to Recovery

Foreword: A Policymaker’s Reflections

1. The Limits of Fiscal Policy

2. Fear of a Deflationary Trap

3. QE3: Data-Driven, Not Date-Driven

4. A Preferred Approach to Normalization

5. A Regime-Based View of the Economy

6. A Push for More Transparency

7. The Road to an Inflation Target

8. Alternatives to Inflation Targeting

9. Conclusion: Lessons Learned

Timeline: Pivotal Events from Crisis to Recovery

Beyond the Role of FOMC Policymaker: Reserve Bank CEO

Our People. Our Work.

Our Leaders. Our Advisers.

Boards of Directors, Advisory Councils, Bank Officers

PUBLISHED APRIL 13, 2018
The views expressed are those of the authors and do not necessarily reflect those of the Federal Open Market
Committee or the Federal Reserve System.
Our financial statements are available online. To read them, go to the website for the annual report,
stlouisfed.org/annual-report/2017, and click on the Financial Statements button in the navigation bar.

C H A I R ’ S M E SSAG E

Promoting a Healthy Economy
and Financial Stability
T

he striking image of a soaring eagle in the St. Louis Fed’s logo serves as a bold symbol of the Bank’s mission to promote a healthy economy and financial stability. That

word—stability—so appropriately describes the importance of the Federal Reserve over
the past decade.
It has been nearly 10 years since the start of the financial crisis that led to what would
become known as the Great Recession. James Bullard began his tenure as president of the
St. Louis Fed in April 2008, just as the financial crisis was heating up.
As our nation struggled during the crisis and slow recovery, the Federal Reserve did not
stand idly by. Through both conventional and unconventional monetary policy actions, the
Fed responded carefully but aggressively by implementing a variety of programs designed
to support the liquidity of financial institutions and improve conditions in financial
markets. President Bullard, along with his fellow participants on the Fed’s Federal Open
Market Committee (FOMC), helped navigate the economy back on course.
Economic conditions today are much better, and the FOMC is in the ongoing process
of returning monetary policy settings to more normal levels. The committee has raised the
federal funds rate several times since December 2015 and recently has begun to gradually
shrink the Fed’s balance sheet. Through the strong leadership over the past decade from
President Bullard and his colleagues across the Federal Reserve System, our nation has
largely recovered from the financial crisis, recession and their aftermath.
The St. Louis Fed’s board of directors is engaged with the Bank’s work in promoting

a healthy economy and financial stability—certainly the cutting-edge research of its
economists, but also the Bank’s leadership in supervising bank holding companies and
state member banks, in fulfilling the Fed’s role of fiscal agent to the U.S. Treasury, and in
increasing the financial literacy and economic education of our citizens. I look toward the
future with confidence as the St. Louis Fed stands in service to the Eighth Federal Reserve
District and beyond.

Kathleen M. Mazzarella
Chair of the Board of Directors
Federal Reserve Bank of St. Louis

2 | Annual Report 2017

Kathleen M. Mazzarella is the chairman, president and CEO of Graybar Electric Co. Inc.

“These past 10 years have been anything but ordinary, defined more
by their lack of convention than by what any model would have
predicted precrisis.”
— James Bullard, President and CEO

P R E S I D E N T ’ S M E SSAG E

A Fascinating Journey
Ten years ago, I was honored to accept the position of president and CEO
of the Federal Reserve Bank of St. Louis. With this appointment, I was
following a line of distinguished policymakers who carried on the strong,
independent and academic research tradition of this Reserve Bank, which
I’ve been a part of since 1990.
One of the interesting aspects of my job is that I started it on April 1, 2008—in the
throes of the financial crisis. The mortgage crisis was already brewing, and banks were
failing. The Fed was cutting the federal funds rate target and debating further stimulus
measures. As you’ll read in this report, this wasn’t the time for lighthearted jokes or jovial
congratulations.
To that end, I’ve spent time with fellow economists and other staff reflecting on how
my presidency has coincided with—and has been somewhat defined by—the financial
crisis, the Great Recession and ensuing recovery. Out of these discussions, an interesting
“look back” began to take shape, fueling this year’s annual report theme, Unconventional:
A Policymaker’s Reflections on Crisis to Recovery.

A Look Back
These past 10 years have been anything but ordinary, defined more by their lack of convention than by what any model would have predicted precrisis. We’ve now lived through
the Great Recession, through an era of near-zero interest rates, through fears that the U.S.
would fall into a deflationary trap as Japan did (but we didn’t) and through the implementation of unprecedented policies aimed at stopping an ever-deepening crisis.

4 | Annual Report 2017

While many of these events are in the rearview

affecting it and what lies ahead. I’m privileged to

mirror, we still face challenging policy decisions. At

serve with my colleagues on the FOMC and help

this 10-year juncture, it seems appropriate to pause

provide the best possible monetary policy to assist

and reflect on the lessons learned. As observed by

the performance of the U.S. macroeconomy. It’s also

the late philosopher George Santayana, “Those

an exciting time to be part of the U.S. central bank,

who cannot remember the past are condemned to

which includes the Board of Governors in Washing-

repeat it.” So, now is a good time to study and learn

ton, D.C., and 12 Reserve banks spread geographi-

from prior economic challenges faced in American

cally throughout the country.

history, including events like the Great Depression

Moreover, as president and CEO of the St. Louis

in the 1930s, the Great Inflation period in the 1970s

Fed, I have the honor of being one of the voices

and the Great Recession of this century.

of Main Street, ensuring economic concerns at

A Look Ahead
At the same time, as any monetary policymaker
and participant on the Federal Open Market Com-

the local and regional levels are represented at the
FOMC table in Washington.
I’m looking forward to serving in the years ahead.
It’s going to be a fascinating journey.

mittee (FOMC) would be, I’m focused on where we’re
going in the years ahead, where the economic recovery is rooting, where the debate on monetary policy
will lead us and what the right policy decisions will
be in a new era.
If the last decade was focused on unconventional
monetary policy, the focus today is on “getting back
to normal”—that is, increasing the Fed’s policy rate

James Bullard
President and CEO
Federal Reserve Bank of St. Louis

in line with better economic conditions and reducing the size of the Fed’s balance sheet, which had
grown under the quantitative easing (QE) programs.
Given the uncertainty about what “normal” is, it is
not surprising that each of us on the FOMC brings
his or her own views to the table on what the appropriate policy rate path might be or how normalization should continue to unfold. Sometimes we
differ, but that diversity of thought and discourse
ultimately yields the best outcome.
Some may think this era will not be as interesting
as the previous 10 years, but I’m fascinated by what’s
to come. We may not know with certainty what the
future will hold, but being at the forefront of the
ongoing, rigorous debate of optimal monetary policy
is critical. We shouldn’t shy away from discussing
new approaches to control inflation, debunking old
myths about how the economy works or discarding
out-of-date macroeconomic theories in favor of
new narratives with better explanatory power of the
regimes in which we find ourselves.
It’s an exciting time to be studying this dynamic
global economy of the 21st century, the factors

On April 1, 2018, James Bullard marked his 10th anniversary as president and CEO
of the St. Louis Fed.

stlouisfed.org | 5

Unconventional
A Policymaker’s
Reflections on Crisis
to Recovery
April 1, 2018, marked James Bullard’s 10-year
anniversary of becoming president and CEO of
the Federal Reserve Bank of St. Louis. In a series
of conversations with Bank staff, he reflected on
what has occurred at the St. Louis Fed as well as
nationally and internationally over that period.
The essays that follow are based on those conversations and
chronicle his experience as a monetary policymaker during a
period that happened to encompass the largest financial crisis
and recovery period in the U.S. since the Great Depression.

stlouisfed.org | 7

“The most important element of this whole era has been encountering
the zero lower bound and then trying to decide what to do, if anything,
given that you can no longer lower interest rates in response to poor
economic circumstances. … That has been the challenge of our times.”
— James Bullard, President and CEO

FO R E WO R D

A Policymaker’s Reflections
In the spring of 2008, James Bullard was finishing the interview process
ACCOMPANYING VIDEOS

to become the 12th president of the Federal Reserve Bank of St. Louis
upon the retirement of William Poole.
At that time, Bullard was the Bank’s deputy director of research for monetary analysis.
He had been with the Bank, known for its monetarist academic research and maverick

New Policymaker

reputation within the Federal Reserve System, since 1990.
“I think one thing to keep in mind is that the financial crisis had already started and was
already ongoing at that time, and I think some of the revisionist history forgets this,” he
recalled. “But for the Fed, it really started in August 2007, because that’s when the LiborOIS spread blew out, which was a signal that banks didn’t trust each other anymore.”
In response to the financial crisis, the Fed established the Term Auction Facility (TAF) pro-

State of Affairs in 2008

gram in December 2007 to provide short-term liquidity to depository institutions. In addition, the FOMC lowered the policy rate several times over the first few months of the crisis.
But then came the implosion and rescue of the Bear Stearns investment firm in March
2008, only two weeks before Bullard officially took over the reins from Poole on April 1.

Hitting the Zero
Lower Bound
Watch online at stlouisfed.org/
annual-report/2017.

The Intensifying Financial Crisis
The Fed’s exigent step of providing term financing to facilitate JPMorgan Chase’s acquisition of Bear Stearns marked the symbolic start of the worst financial crisis to occur in
the U.S. since the Great Depression. It also marked the beginning of the FOMC’s unprecedented and uncharted monetary policymaking that was deployed to keep the U.S. financial
system and economy intact.

8 | Annual Report 2017

“The timing of my coming into this role was just
shortly after Bear Stearns,” Bullard said. “And what
it really meant was that most of what I knew about

SN A PSHOT IN TIME: From Bullard’s Presentation on Nov. 21, 2013

3-Month Libor-OIS Spread

ordinary central banking was going out the window

100

just as I moved on to the FOMC.”

It also set the stage for a different kind of welcome
that Bullard officially became president.
“When you’re named president, it’s all very secret,”
Bullard recalled. “On the day you take office, the

Basis Points

call from Fed Chairman Ben Bernanke on the day

chair calls you at 10:30 in the morning. I knew Ben

70
60
50
40
30

Bernanke from my research days and had talked with

him many times. I thought it would be kind of a pep

talk. But, no, it was all the details of the Bear Stearns

deal and the mezzanine tranches, and how the Fed

Jul-2007

was going to get paid back, and all this kind of thing.

Aug-2007

Sep-2007

Oct-2007

“It showed the intensity of the crisis even at that
moment,” he added. “That was the context of my
taking the job.”

The Notorious Summer of 2008
The intensity only ratcheted up from there, as the
summer of 2008 turned into fall, and more signs of
systemic threats to global financial stability appeared.

The Libor-OIS spread began rising substantially in August 2007, which signaled the
beginning of the financial crisis.
SOURCES: Reuters, British Bankers’ Association and Bullard’s calculations.

SN A PSHOT IN TIME: From Bullard’s Presentation on Jan. 14, 2016

Real Oil Price (West Texas Intermediate)

A retrospective speech given about five years after

140

the crisis reflects Bullard’s thinking during that time:
ble to argue that we would muddle through. And
I felt all during this period that we would muddle
through, as a staff person, and even after I was
named president, and I told people I thought we
would muddle through.” He added, “It sounds crazy
1

looking at it today because it turned out to be such a
disaster, but there actually is a pretty good argument
to be made that during the summer of 2008, you
could still view the world that way.”
He noted that the financial crisis had been ongo-

120

2009 Dollars per Barrel

“The gist was, as of August 2008, it was still possi-

100

January 2008 to
July 2014 average: $85

80
60
40

1988 to 2003
average: $30

20
0
Jan-1988 Jan-1992 Jan-1996 Jan-2000 Jan-2004 Jan-2008 Jan-2012 Jan-2016

ing for a year at that point, and real gross domestic
product (GDP) data at the time suggested that the
U.S. was not in recession. He also noted that virtually
all economic forecasts of the day, including those
of Fed staff, pointed to continued modest economic
growth for the rest of 2008—not to a full-blown crisis

The real (inflation-adjusted) price of oil nearly doubled between the summers of 2007
and 2008. This oil price shock contributed to slower U.S. economic growth in the
second half of 2008.
SOURCES: U.S. Energy Information Administration, The Wall Street Journal, Bureau of
Labor Statistics and Bullard’s calculations.

that would cripple economic growth, lead to interest
rates at the zero lower bound and cause what is now
known as the Great Recession. The tremors that had

stlouisfed.org | 9

arisen in the booming housing market were expected

of the U.S. Treasury, authorized the New York Fed

to dissipate, as the depths of the losses to come from

to lend up to $85 billion to AIG through a revolving

the subprime mortgage market crisis had not yet bub-

credit facility.

bled to the surface. Furthermore, the positive effects

The collapse of Lehman Brothers and the bailout

from lower interest rates were expected to take hold

of AIG continued to send U.S. and international

during the fall of 2008.

financial markets into a tailspin, which was then

“A popular argument at the time was that, ‘We’ve

compounded by wave after wave of other economic

already done a lot, and now that’ll get us through the

shocks—the U.S. housing market crash and ongoing

rest of the way, and we’ll avoid recession,’” he said.

foreclosure crisis; the placement of Fannie Mae and

By that time, however, another concern was brew-

Freddie Mac into government conservatorship; and

ing: The price of oil had doubled since the summer

the failures of IndyMac and Washington Mutual, the

of 2007. Higher oil prices contributed to a decline

first of many large- and small-bank failures to come.

in vehicle sales and a drop in business confidence,
among other economic effects.

The Zero Lower Bound

“So, you had this oil price shock. The economy
usually doesn’t react well to that kind of a shock, so
maybe it’s not surprising that the economy actually
turned out to be deteriorating in the second half
of 2008,” he noted. “The slower economic growth
made the crisis much worse than it otherwise would
have been.”

The Collapse of Lehman
and AIG
In business since 1850, Lehman Brothers was a
major global financial services firm and the fourthlargest investment bank in the U.S. It was one of the
first Wall Street firms to expand into the mortgage
origination business. However, by 2008, it had suffered tremendous losses from holding large positions in subprime and other lower-rated mortgage
tranches. It went bankrupt on Sept. 15, 2008.
AIG, or the American International Group, was a
global insurance giant and a major seller of credit
debt swaps. It had close to $1 trillion in assets before
it crashed and almost failed a few days after Lehman. On Sept. 16, 2008, the Fed, with the support

10 | Annual Report 2017

A perfect storm had been set for an extraordinary
time of unconventional monetary policymaking to
prevent a worldwide economic crash, and Bullard’s
background at the St. Louis Fed would help him not
only to define and deliberate, but also to challenge or
champion, the novel moves the FOMC would make
during the next 10 years. He would also call for a
new way of thinking as interest rates hit the zero
lower bound and as inflation remained below target
despite the recovery of the economy after the crisis.
“The most important element of this whole
era has been encountering the zero lower bound
and then trying to decide what to do, if anything,
given that you can no longer lower interest rates
in response to poor economic circumstances,” he
said. “It was previously considered a very remote or
unlikely scenario, and so that has been the challenge
of our times.”
EN DN OTE

For more details, see Bullard, James. The Notorious
Summer of 2008, a presentation delivered in Rogers, Ark.,
Nov. 21, 2013.

Top left: Then-Federal Reserve Board Governor Jeremy Stein presents at the
St. Louis Fed’s Center for Household Financial Stability’s Research Symposium
in 2013 and discusses how monetary policy could be employed to address
credit market overheating when it threatens financial market stability.
Top right: St. Louis Fed President James Bullard (left), then-Fed Board
Governors Elizabeth Duke (second to left) and Jay Powell (right), as well as
then-Fed Vice Chair Janet Yellen take questions from St. Louis Fed employees
at an open forum in the Bank’s Gateway Auditorium in 2013.
Middle: Current and former Fed Reserve bank presidents with then-Fed Chairman Ben Bernanke, former Fed Chairmen Paul Volcker and Alan Greenspan,
and then-Fed Vice Chair (later Chair) Janet Yellen, at a 2013 event in Washington, D.C., commemorating the centennial of the Federal Reserve Act.
Bottom: Current and former St. Louis Fed presidents. From left to right:
Theodore Roberts, James Bullard, William Poole and Thomas Melzer.

“When the Fed lowered its key policy rate essentially to zero, many
people thought it was out of policy options and that fiscal authorities
would have to step in to provide short-term stabilization policy. Jim
Bullard argued in his 2012 ‘Death of a Theory’ paper that central
banks can still be effective by using unconventional tools and can
usually act faster than fiscal authorities can.”
— David Wheelock, Group Vice President and Deputy Director of Research

The Limits of Fiscal Policy
James Bullard shared some reflections on his first 10 years as Bank president during recent conversations
with staff. The following are excerpts from those discussions.

Stabilization policy means reacting to data and changing the direction
of policy in a timely manner in response to changing economic
circumstances. Before the financial crisis, the conventional wisdom
suggested that fiscal policy was not very effective as a macroeconomic
stabilization tool. Although calls for fiscal approaches to stabilization
policy gained popularity during the crisis, the precrisis lesson has
been borne out in the past 10 years. Namely, it is difficult in Western
democracies to ask the political process to bear the burden of providing
day-to-day stabilization policy. This type of policy intervention should
remain in the realm of monetary policy.
Why was this the conventional wisdom? In the U.S., the FOMC can meet every six
or eight weeks, or more often if necessary. Decisions and adjustments to policy can be
made fairly quickly in response to changing economic conditions. One could argue about
whether the FOMC made the right decisions at various junctures, but it is at least in position to take those kinds of quick actions. In contrast, going through the political process to
change the tax code or government spending plans can be very complicated. It is doubtful
that such a process could be completed in a timely manner and in a way that reacts to
current developments in financial markets and the economy as a whole.
12 | Annual Report 2017

Thus, for the two decades before the crisis, the
idea was that fiscal policy should be set over longer
time horizons (e.g., five or 10 years) and that mon-

SN A PSHOT IN TIME: From Bullard’s Presentation on Jan. 13, 2012

Policy Rates in the G-7 Countries

etary policy should be used to make the day-to-day

adjustments through interest rate policies.

funds rate to a target range of 0 to 0.25 percent—the
so-called zero lower bound. Many people said this
meant that the FOMC couldn’t do anything else to
provide short-term stabilization for the macroeconomy and that, consequently, fiscal policy would have
to fill that role.
However, the FOMC was not out of ammunition
after hitting the zero lower bound. The FOMC used
unconventional policy—QE and, to some extent, forward guidance—to provide stabilization policy. Other

Percent per Annum

In December 2008, the FOMC reduced the federal

5
4

U.K.
U.S.
Canada
Euro area
Japan

3
2
1
0
Jan-2005 Jan-2006 Jan-2007 Jan-2008 Jan-2009 Jan-2010 Jan-2011 Jan-2012

central banks also turned to unconventional policy,
including QE in the U.K., Japan and the eurozone.
policy are effective, this means that the monetary

The G-7 countries lowered their policy rates to near zero in late 2008 and early 2009.
Some central banks, including the Fed, used unconventional tools to provide additional
stabilization policy.

authority can still run stabilization policy and that

SOURCE: Haver Analytics.

To the extent those ways of carrying out monetary

going through the fiscal channel is unnecessary. My
2012 paper “Death of a Theory” argued that stabilization policy should be viewed the same way after the
crisis—i.e., that monetary policy should still be used
to respond to short-term fluctuations in the economy.
The older, precrisis idea about how to divide the
responsibility for stabilization between monetary
policy and fiscal policy remains valid today. Given
the difficulty of going through the political process,
the central bank should continue to have primary
responsibility for stabilization policy even when the
policy rate is at or near the zero lower bound. On
the other hand, fiscal authorities should focus on tax
and spending programs that will achieve mediumor long-term goals.

A DD I T I O N A L R E S O URCES

“Three Funerals and a Wedding” (Bullard’s speech
delivered in Evansville, Ind., Nov. 20, 2008)
“Death of a Theory” (Bullard’s article in the Federal
Reserve Bank of St. Louis Review, March/April 2012)
“The Global Battle Over Central Bank Independence”
(Bullard’s presentation delivered in San Diego,
Jan. 4, 2013)

The FOMC holds scheduled meetings eight times per year in Washington, D.C.,
to set monetary policy. Participants include members of the Board of Governors
and presidents of the 12 regional Reserve banks.

stlouisfed.org | 13

DEEPER DIVE

Connecting Frontier Research with Policy
James Bullard joined the Research division
in 1990 as an economist. But his academic

He added that the two sides should communicate more and should challenge each other.
“The policy people can certainly challenge the

research didn’t stop when he became president
and CEO 10 years ago and, thus, became a

academic types by saying that what you’re doing

participant on the FOMC, the Federal Reserve’s

isn’t helping me make policy, but on the other

monetary policymaking body.

hand, there are important ideas in the academic

One of Bullard’s goals since taking on this role

world that should come across to the policy

has been to strengthen the connection between

world,” he said. “I think there’s been more of this

academic research and monetary policy. He

in recent years on the FOMC, and I think we’ll

noted how the views of central bankers have

see more in the future.”
He likened the process to putting a man on

been increasingly sought after for leadership
regarding the overall economy, not just for

Jupiter. In this event, “you don’t want to take

monetary policymaking.

seat-of-the-pants engineering. You would take

In addition to encourag-

the very best engineering that you could find,

ing innovative research

and then you would apply those ideas and you

among St. Louis Fed

put the guy in the rocket ship and send him to

all the issues that might affect

economists for this rea-

Jupiter,” he said. “I think the same is true here.

macroeconomic outcomes, both

son, Bullard has contin-

You’re trying to manage the U.S. economy and,

in the U.S. and worldwide. … You

ued his own academic

to some extent, the global economy. You want

research as president.

the very best ideas deployed, and that’s going to

“To be on the FOMC, you have
to more or less be cognizant of

want the very best ideas deployed,

“To be on the FOMC,

mean wrestling with tough concepts and bring-

and that’s going to mean wrestling

you have to more or less

with tough concepts and bringing

be cognizant of all the

those to the policy process.”

issues that might affect

on three main areas of research that were

macroeconomic out-

particularly interactive with the current policy

comes, both in the U.S.

environment: fiscal policy in the post-crisis

and worldwide,” Bullard

world, regime-based macroeconomics and

— James Bullard, President and CEO

ing those to the policy process.”
In his time as president, Bullard has focused

said. “There’s no better way to be in tune with

alternatives to inflation targeting. Each of these

those issues than to contribute yourself to ongo-

is covered in more detail in other sections of

ing research in various areas.”

this annual report.

To be sure, academic research and monetary
policy have not always been in sync. “I feel pretty
strongly about this, because I think that the pro-

EN DN OTES

See Bullard, James. Research in Macroeconomics
after the Crisis, a presentation delivered in Washington, D.C., March 17, 2011.

See Bullard, James. President’s Message: The
Importance of Connecting the Research World
with the Policy World. The Federal Reserve Bank of
St. Louis The Regional Economist, October 2013.

fession has long been bifurcated, where there is a
certain group of people that did the research and
then there’s another group of people that did the
policy, and the policy didn’t look all that much
like the research,” Bullard said.1
Instead of having the profession split into two
parts, he emphasized the need to merge them.2

14 | Annual Report 2017

Top left: The St. Louis Fed’s Women in
Economics Symposium brings together
female leaders in the field of economics
to discuss how to attract more diversity
to the profession. The event, in February
2018, included (from left to right): Gail
Hafer, economics professor at St. Louis
Community College-Meramec; Ellen
Zentner, managing director and chief
U.S. economist at Morgan Stanley;
Claudia Sahm, section chief for consumer/
community development research at the
Fed Board; and Mary Daly, executive vice
president and director of research at the
San Francisco Fed.
Top middle: Kevin Kliesen, business economist and research officer at the St. Louis
Fed, regularly engages with business and
industry leaders to present national and
local economic conditions and outlooks.

Top right: Mohamed El-Erian, then-CEO
and co-chief investment officer of PIMCO,
presents at the St. Louis Fed’s annual
Homer Jones Memorial Lecture in 2012
and advocates for public and private
sector agencies to work in conjunction
with global central bank policies to limit
the risks of further disruptions brought
on by the financial crisis.
Middle: Then-research analysts, Lin
Shao and Peter McCrory, help advance
the scholarly work of St. Louis Fed
economists.
Bottom: David Andolfatto, vice president and economist at the St. Louis Fed,
interviews Ayse Imrohoroglu, professor of
finance and business economics at USC,
about her work on Chinese saving rates
at the Bank’s research conference in 2015.

“In 2010, measures of core inflation were low and declining in the U.S.
Jim Bullard became greatly concerned about this trend and the risks
of ending up in a deflationary trap as Japan did. With the FOMC’s
policy rate already near zero, he argued for additional quantitative
easing, or QE, to avoid deflation. To help make his case, he released
his influential ‘Seven Faces of “The Peril”’ paper in July of that year.
The FOMC began QE2 in November 2010.”
— Cletus Coughlin, Senior Vice President and Chief of Staff to the President

Fear of a Deflationary Trap

James Bullard shared some reflections on his first 10 years as Bank president during recent conversations
with staff. The following are excerpts from those discussions.

ACCO M PA N YI NG VI D EO

The Great Recession officially ended in June 2009, and the economy
began to recover slowly. Positive real GDP growth resumed, while payroll
employment losses slowed down and eventually turned into gains.
Inflation, however, was a different story.
By a variety of measures, inflation not only was low but was declining in 2010. Some

Avoiding Deflation

measures of core inflation even dipped below 1 percent in 2010. In my view, some people at

Watch online at stlouisfed.org/
annual-report/2017.

the FOMC meetings did not seem overly concerned about the immediate U.S. inflation situation. But, the disinflationary trend didn’t look good from my perspective. I highlighted it in
a paper called “Seven Faces of ‘The Peril,’” which was initially released in late July 2010.
In the paper, I compared what had happened in Japan with what was happening in the
United States. Japan, which is a big, industrial economy similar to the U.S., had been battling deflation for more than a decade at that point. Basically, Japan was stuck in a longrun outcome of low nominal interest rates and deflation.1 The general attitude in the U.S.
seemed to be that there was something special about Japan and that the Japanese-style
outcome couldn’t happen here. However, I didn’t really think that was the case.
The paper included a theoretical explanation for why we could possibly get stuck in the
same situation as Japan—namely, that the FOMC’s promise to keep the policy rate near
zero for an “extended period” may be counterproductive and may encourage the undesired
long-run outcome. The conclusion was that, among the options available to the FOMC, the

16 | Annual Report 2017

best course of action for turning inflation around
was to implement QE. Thus, I was a big advocate of
beginning a QE2 program.
In my opinion, the release of that paper and my

SN A PSHOT IN TIME: From Bullard’s Presentation on Nov. 8, 2010

Personal Consumption Expenditures and
Consumer Price Index Inflation Measures
3.5

around QE2. For example, the talk in financial markets of a possible QE2 program accelerated. In addition, Chairman Bernanke gave a speech in Jackson
Hole, Wyo., in August that was interpreted as being
more sympathetic to the possibility of QE2 than his
previous remarks. According to financial markets,
the probability that the FOMC would go ahead with
a new QE program essentially went from zero percent in July 2010 to 100 percent in early November,

Year-over-Year Percent Change

CNBC interview the next day ignited a lot of the fire

3.0
2.5
2.0
1.5
1.0

FRB Dallas Trimmed-Mean PCE
Core PCE
Core CPI

0.5

which is when the FOMC decided to implement the

0.0

program. (QE2 consisted of purchasing $600 billion

Jan-2007 Jul-2007 Jan-2008 Jul-2008 Jan-2009 Jul-2009 Jan-2010 Jul-2010

of longer-term Treasury securities from November
2010 through June 2011.)
Was QE2 successful? Because of the forwardlooking nature of financial markets, the financial
market effects mostly occurred between late July and
early November and were in the expected direction.
Equity prices rose, the dollar depreciated dramatically,
longer-term interest rates fell, and inflation expecta-

In early 2010, inflation was close to the Fed’s then-implicit inflation target of 2 percent.
But a disinflation trend developed that year, sending some measures of core inflation
below 1 percent. Note that this figure combines series from two different figures in
Bullard’s presentation on Nov. 8, 2010.
SOURCES: Bureau of Economic Analysis, Federal Reserve Bank of Dallas and Bureau of
Labor Statistics.

tions rose. Actual inflation also turned around and
increased during 2011. By January 2012, headline

A DDITION A L R ESOU R CES

inflation was above the Fed’s 2 percent target, and core

“Seven Faces of ‘The Peril’” (Bullard’s article in the Federal Reserve Bank of
St. Louis Review, September/October 2010; preprint version from July 2010)

inflation was right at target. Based on these results, I
thought QE2 was very successful at that point.
Although the financial market effects were as
expected, there was also an expectation that real
GDP growth would pick up. People thought that

“A Two-Headed Dragon for Monetary Policy” (Bullard’s presentation delivered
in San Francisco, Jan. 3, 2009)
“QE2 in Five Easy Pieces” (Bullard’s presentation delivered in New York,
Nov. 8, 2010)

the financial market effects would, in turn, lead to
improvement in the real economy (such as increased
household consumption, export activity and investment activity). However, that never happened.
Slower real GDP growth has persisted over the
past several years, with the U.S. averaging about
2 percent growth since the financial crisis.2
E N DNOT E S

See Benhabib, Jess; Schmitt-Grohé, Stephanie; and Uribe,
Martín. The Perils of Taylor Rules. Journal of Economic
Theory, January 2001, Vol. 96, Issues 1-2, pp. 40-69.

Growth in 2017, however, exceeded 2 percent and suggests
the possibility of a more rapid growth regime.

Axel Weber, thenpresident of the
Deutsche Bundesbank (the central
bank of the Federal
Republic of Germany)
and member of the
governing council of
the European Central
Bank, presents at the
St. Louis Fed’s annual
Homer Jones Memorial
Lecture in 2011 and
discusses the challenges for monetary
policy in the European
Monetary Union.
stlouisfed.org | 17

“Jim Bullard was an early advocate of state-contingent, or datadriven, quantitative easing in 2009, when date-driven QE policy
was the approach of choice. Eventually, by 2012, the entire
Committee came around to the view that QE should be datadriven, not date-driven. QE3 was designed on the concept of
state-contingent, data-driven policy.”
— Christopher Waller, Executive Vice President and Director of Research

QE3: Data-Driven, Not Date-Driven

James Bullard shared some reflections on his first 10 years as Bank president during recent conversations
with staff. The following are excerpts from those discussions.

In 2012, about three years post-recession, the U.S. economy wasn’t
ACCO M PA N YI NG VI D E O

growing as fast as people would have liked, and the pace of improvement in the labor market slowed. Furthermore, inflation wasn’t as high
as people expected it to be. As mentioned earlier, headline inflation was
above the Fed’s 2 percent target, and core inflation was right around the

State Contingency
Watch online at stlouisfed.org/
annual-report/2017.

target in early 2012. During the first half of that year, however, inflation
began declining and went below target (although not as far below as
in 2010).
Consequently, many policymakers felt like they wanted to do more to help stimulate
the economy. The FOMC voted in September 2012 to begin a third quantitative easing
program, known as QE3, and stated that the program would continue until the labor
market outlook improved substantially.
I was not very supportive of QE3 at that time because, in my view, the data didn’t
support such a major decision. For instance, while job growth wasn’t as robust as
people would have liked, I thought that the slower job growth perhaps had become
the norm, since we were several years past the financial crisis.1 Furthermore, the U.S.
economy wasn’t in recession, nor did a recession look imminent. Those are among the

18 | Annual Report 2017

DEEPER DIVE
reasons that I opposed beginning a new QE program at that

State-Contingent Policy

particular time.
However, I did support QE3’s open-ended aspect, which is a
form of state-contingent or data-dependent policymaking and
which stood in contrast with the fixed end dates associated with
QE1 and QE2. As early as 2009, I had advocated for balance sheet
policy to be state-contingent and adjusted depending on economic
conditions, much like interest rate policy had been prior to the
financial crisis. For instance, I argued that the FOMC should say a
QE program would continue until the desired results for the economy were achieved, instead of saying it would end on a particular
date that did not depend on goals being met.
This was not a very popular idea at first. But the FOMC eventually came around with QE3. In addition, the recent QE programs
of the Bank of Japan and the European Central Bank (ECB) took
the open-ended, state-contingent form.
At the December 2013 meeting, the FOMC decided to begin

One of the consistent themes underlying
James Bullard’s thinking has been the importance of state-contingent, or data-dependent,
monetary policy, even when the FOMC uses
unconventional policy such as QE and forward
guidance.1
“State-contingent policy means that you
should react to economic events and not do
things according to the calendar,” Bullard said.
“I do think it’s a problem in monetary policymaking that there’s somehow an overwhelming
urge to say that you’re going to do certain things
at certain times, regardless of what’s going on
in the economy. But everything we know about

reducing the pace of asset purchases the following month. In

“State-contingent policy means

October 2014, the FOMC determined that substantial improvement in the labor market outlook had occurred and ended the

that you should react to economic

QE3 program.

events and not do things according

ENDNOTE

to the calendar … I’ve tried to be

an advocate for this at the FOMC.”

I also thought that some other labor-market trends, such as the decline
in the labor force participation rate, were largely due to demographic
changes rather than cyclical factors. For more, see my speech from Feb. 19,
2014, The Rise and Fall of Labor Force Participation in the U.S.

— James Bullard, President and CEO

economics and economic policy says that, ‘No,
A DD I T I O N A L R E S O URCES

the policy should be calibrated to what’s actually

“The Fed’s New Regime and the 2013 Outlook” (Bullard’s presentation
delivered in Madison, Wis., Jan. 10, 2013)

happening in the economy,’ which means reacting to what’s actually going on.
“And so, I’ve tried to be an advocate for

“The Fed’s Latest Balance-Sheet Policy: What Constitutes Substantial
Labor-Market Improvement?” (President’s Message: The Regional
Economist, January 2013)

this at the FOMC. I think that we’ve had only

“The Tapering Debate: Data and Tools” (Bullard’s presentation delivered in
St. Louis, Nov. 1, 2013)

slipped back more into calendar-style policy

mixed success, and sometimes I think we’ve
instead of state-contingent policy.”
EN DN OTE

For examples, see Bullard, James. Three Lessons for
Monetary Policy from the Panic of 2008, a presentation delivered in Philadelphia, Dec. 4, 2009; and
Bullard, James. President’s Message: What Does
Data Dependence Mean? The Federal Reserve Bank
of St. Louis The Regional Economist, January 2016.

stlouisfed.org | 19

“In late 2008, as the financial crisis escalated, the FOMC reduced the
federal funds target rate as low as it could—essentially to zero. To
foster economic conditions that would help the Fed achieve its dual
mandate of stable prices and maximum sustainable employment, it
also turned to other accommodative tools, primarily QE. This led
to a huge increase in the Fed’s balance sheet. When it came time to
determine the strategy for returning policy settings to normal, Jim
Bullard made the case for a ‘last-in, first-out’ approach—i.e.,
reducing the balance sheet first before raising the policy rate.”
— Cletus Coughlin, Senior Vice President and Chief of Staff to the President

A Preferred Approach to Normalization

James Bullard shared some reflections on his first 10 years as Bank president during recent conversations
with staff. The following are excerpts from those discussions.

After the FOMC ended its QE3 program in the fall of 2014, the focus turned
ACCO M PA N YI NG VI D EO

to when it would begin normalizing monetary policy. In December 2015,
the FOMC voted to raise the policy rate from its near-zero level, which is
commonly referred to as “liftoff,” as the first step in normalization; it has
since raised the policy rate several more times. Some 21 months later,

LIFO Approach
to Normalization
Watch online at stlouisfed.org/
annual-report/2017.

in September 2017, the FOMC announced that, beginning the following
month, it would start the gradual process of reducing the Fed’s balance
sheet, which had grown from about $870 billion in August 2007 to about
$4.5 trillion as a result of quantitative easing.
The FOMC chose to raise the policy rate first before starting to shrink the balance sheet,
but I favored the opposite sequence—a last-in, first-out (LIFO) policy. I thought there was a
clear argument in favor of that approach.
The idea behind a LIFO approach to normalization is as follows. In easing monetary policy, the FOMC lowered the policy rate essentially to zero, the so-called zero lower bound.
Because the policy rate couldn’t be reduced further, the FOMC turned to QE, which led to
a substantial increase in the size of the Fed’s balance sheet. The asset purchases under the
various QE programs included mostly longer-maturity Treasury securities and mortgagebacked securities, but also some federal agency debt. On the liability side of the Fed’s

20 | Annual Report 2017

balance sheet, this meant an increase in reserves

Eﬀective Federal Funds Rate (left)
All Federal Reserve Banks: Total Assets (right)

held by financial institutions. Once the economy
had recovered sufficiently, the natural sequence of

events, in my view, was to reduce the size of the balance sheet down to its normal size, and then to raise

5,600

Sept. 20, 2017:
The FOMC announces that balance sheet
normalization will begin in October.

4,800

the policy rate back to its normal level.
Percent

reserves in the system was initially low but then
rose substantially because of the asset purchases. If

4,000

3,200

the level of reserves were brought way back down
again, then policymakers could run their operating

way as in the past.1 I think that approach makes a

2,400

Dec. 16, 2015:
The FOMC raises the policy
rate from its near-zero level.

procedure and could raise the policy rate the same
1

Billions of Dollars

In the sequence I have described, the amount of

1,600

lot of sense.
However, the FOMC decided to start slowly

raising the policy rate first. Policymakers were

800
2008

2010

2012

2014

2016

2018

constrained by the zero lower bound when reducing
the policy rate, but they were not constrained by the

use unconventional policies, such as QE, to provide

The FOMC lowered the policy rate essentially to zero in December 2008 and
implemented three QE programs over the next several years, which caused the Fed’s
balance sheet to increase substantially. During normalization, the FOMC raised the
policy rate first before beginning to shrink the balance sheet.

further monetary accommodation when needed. But

The shaded area indicates a recession.

during normalization, the FOMC could adjust both

SOURCE: Board of Governors of the Federal Reserve System (data retrieved from
FRED® on March 22, 2018).

zero lower bound when raising it. In other words,
once the policy rate was near zero, the FOMC had to

the policy rate and the size of the balance sheet. The
FOMC chose to use the policy rate as the primary
way to adjust policy.
I still believe shrinking the balance sheet first

EN DN OTES

For more details on the operating procedure, see Williamson,
Stephen. What Is Monetary Policy Normalization? The
Federal Reserve Bank of St. Louis Annual Report 2015.

To raise the policy rate, the Fed must also raise the interest
rate on excess reserves (IOER) and the offering rate on
overnight reverse repurchase agreements (ON-RRP). These
two rates provide the upper and lower bounds of the target
range for the policy rate.

Typically, an inverted yield curve helps predict recessions.
For more, see my presentation from Dec. 1, 2017, Assessing
the Risk of Yield Curve Inversion.

would have been the right approach to normalization. Doing liftoff first has forced the FOMC to raise
the policy rate in a world of superabundant reserves.
Because reserves are not scarce like they were before
the crisis, the Fed has had to adopt new operating
procedures for raising interest rates.2
In addition, raising the policy rate while maintaining a large balance sheet has led to some flattening
of the yield curve. This is one reason why I argued
in late 2016 and early 2017 to get going on shrinking the size of the Fed’s balance sheet. The FOMC’s
interest rate policy was putting upward pressure on
short-term interest rates, while the balance sheet policy was putting downward pressure on longer-term
interest rates. A more natural normalization process
would allow all interest rates to increase together.
Although the FOMC began the process of gradually

A DDITION A L R ESOU R CES

“U.S. Monetary Policy and the Path to Normalization” (Bullard’s presentation
delivered in London, March 30, 2011)
“Federal Reserve issues FOMC statement on policy normalization principles and
plans” (Board of Governors of the Federal Reserve System press release
from Sept. 17, 2014)
“A Case for Shrinking the Fed’s Balance Sheet” (President’s Message:
The Regional Economist, Second Quarter 2017)

reducing the size of the balance sheet in late 2017, it
remains important to keep an eye on the yield curve
as monetary policy normalization proceeds.3
stlouisfed.org | 21

“The St. Louis Fed has a long tradition of challenging the status
quo. In 2016, Jim Bullard and the St. Louis Fed’s Research division
pivoted to a new approach for evaluating the U.S. macroeconomy,
which also had implications for how it views optimal monetary policy.
Rather than assuming the economy will converge to one long-run
outcome—the conventional approach—the St. Louis Fed now assumes
the economy can switch between different states, or regimes, and
the regime will influence the outlook for the macroeconomy and
monetary policy.”
— Christopher Waller, Executive Vice President and Director of Research

A Regime-Based View of the Economy

James Bullard shared some reflections on his first 10 years as Bank president during recent conversations
with staff. The following are excerpts from those discussions.

Coming out of a recession, a typical forecast would suggest that the
ACCO M PA N YI NG VI D EO

economy will grow faster for a while than it otherwise would, that job
growth will be higher than normal for a while and that inflation might
start to pick up and possibly go above the Fed’s 2 percent target. Then,
these variables would settle back to their steady-state rates of growth.

The New Narrative
Watch online at stlouisfed.org/
annual-report/2017.

That is, they would return to their average historical values. This
approach to forecasting assumes that the economy will ultimately
converge to a single, long-run outcome. It was the common approach
used by many FOMC participants, including me.
Given that viewpoint, and since the Fed’s dual mandate (of stable prices and maximum
sustainable employment) was close to being achieved in 2014, I had been an early proponent of moving forward with the normalization process, which included the policy rate’s
returning to its steady-state value.
But, by mid-2016, the Research team here at the Bank and I had become increasingly
frustrated because our forecasts of the macroeconomy under this approach turned out to
be wrong for four or five years in a row. Similarly, the “dot plots” in the FOMC’s quarterly

22 | Annual Report 2017

Summary of Economic Projections (SEP)—including the St. Louis Fed’s dots, or projections for
the policy rate—repeatedly projected many more

SN A PSHOT IN TIME: From Bullard’s Presentation on Feb. 26, 2018

Labor Productivity Growth

increases in the policy rate over the forecast horizon
wasn’t useful.
Therefore, at the St. Louis Fed, we changed our
approach to near-term forecasts of the macroeconomy and monetary policy in June 2016. The
new approach required us to think differently about
the possible long-run outcomes of the macroeconomy. Instead of having only one such long-run

Year-over-Year Percent Change

than actually occurred. The conventional approach

6
5

Kahn & Rich (2006) high state: 2.90%
Kahn & Rich (2006) low state: 1.33%

4
3
2
1
0

outcome, as was the thinking behind our previous
narrative, the macroeconomy could switch between

-1

regimes (or steady states) and, therefore, could have

Jan-1985

Jan-1990

Jan-1995

Jan-2000

Jan-2005

Jan-2010

Jan-2015

a set of possible long-run outcomes.
The basic idea behind the new narrative was that
there are three fundamental factors that can determine the nature of the regimes: productivity growth
(which could be high or low), the real interest rate

SN A PSHOT IN TIME: From Bullard’s Presentation on Feb. 26, 2018

Desire-for-Safe-Assets Regimes
6

on short-term government debt (which could be high

= r† - -

or low) and the state of the business cycle (expansion

or recession).

Desire for Safe Assets: Fitted Values

The current regime appears to be characterized by
which could be a relatively long-term outcome for
the U.S. economy. The regime idea suggests that a
situation like this could persist for many years and
that we should not expect the same patterns from
the previous decades to return, at least not in the
near term.
This idea is particularly apt for the current

Percent

low growth, low interest rates and also low inflation,

2
0
-2
-4
-6
Jan-1984

Jan-1992

Jan-2000

Jan-2008

Jan-2016

environment. Safe, short-term real interest rates in
the U.S. are extremely low and have been trending
downward overall since the 1980s. Furthermore, the
low safe real interest rates are a global phenomenon.
For more recent trends in real-interest-rate regimes,
see the presentation I delivered in Washington, D.C.,
on this topic.1
For purposes of monetary policy, which is regimedependent, the planning horizon is two to three

As of February 2018, the U.S. appeared to be in a regime of low productivity growth
and a high desire for safe assets. The latter is indicated by the relatively large negative
value for ξ.
SOURCES: Kahn, James A.; and Rich, Robert W. Tracking Productivity in Real Time.
Federal Reserve Bank of New York Current Issues in Economics and Finance, November
2006, Vol. 12, No. 8; Federal Reserve Bank of New York; Bureau of Labor Statistics;
Board of Governors of the Federal Reserve System; Federal Reserve Bank of Dallas;
and Bullard’s calculations.

years.2 Given that long-run trends affecting the
economy are unlikely to turn around in two to three
years, we assume in our new narrative that the current regime will continue over that horizon.

stlouisfed.org | 23

DEEPER DIVE
The St. Louis Fed’s projections for monetary policy
are, therefore, calibrated for the low regime. Hence, our
projected policy rate path is relatively flat over the forecast horizon, which stands in contrast with the FOMC’s
median path. If a regime switch were to occur, our
forecasts would then be calibrated for that new regime.
Upside risks to our forecasts (e.g., higher inflation, an
increase in the real rate or higher productivity growth)
would lead us to steepen our path for the policy rate.
E N DNOT E S

See my presentation from Feb. 26, 2018, R-Star Wars: The
Phantom Menace.

Under this regime-based approach, the St. Louis Fed stopped
providing long-run projections in the FOMC’s SEP because
there is not a single, long-run steady state for the economy.

The Maverick
Monetarist Tradition
For many decades, the St. Louis Fed has maintained a reputation in the Federal Reserve System
for challenging the status quo, enhancing the rigor
of the monetary policy debate, and pushing the
frontier of research in academic and policy circles.
The Bank came to be known as the “maverick”
Federal Reserve bank during the Great Inflation
period of the 1970s, when there was double-digit
inflation and double-digit unemployment.1 “The
famous misery index was off the charts,” James
Bullard said. The misery index, created in the 1970s
by economist Arthur Okun, is equal to the sum of
the inflation and unemployment rates.2

A DD I T I O N A L R E S O URCES

“The St. Louis Fed’s New Characterization of the Outlook for
the U.S. Economy” (Federal Reserve Bank of St. Louis
announcement on June 17, 2016)

For many decades, the St. Louis
Fed has maintained a reputation
in the Federal Reserve System

“The St. Louis Fed’s New Approach to Near-Term Projections”
(Bullard’s post on the Federal Reserve Bank of St. Louis
On the Economy blog, Aug. 25, 2016)

for challenging the status quo …

“An Illustrative Calculation of r†” (Bullard’s presentation
delivered on Amelia Island, Fla., May 8, 2017)

“maverick” Federal Reserve bank

[and] came to be known as the
during the Great Inflation period
of the 1970s.
While this was a time of intense pressure on
the Reserve banks to support System policy, the
St. Louis Fed instead argued that Fed policies and
excessive growth of the money supply were to blame
for higher inflation.
“The St. Louis Fed stressed that the Fed really
had to get this process under control,” Bullard said,
adding, “The monetarist experiment in the [Fed
Chairman Paul] Volcker era was the ultimate outcome of that line of research, leading to much lower
inflation, despite taking much of the 1980s to get it
under control.”
St. Louis Fed presidents were aided by analysis
and data provided by research divisions led by
Homer Jones, Leonall Andersen, Jerry Jordan and,

David Wheelock, group vice president and deputy director of research
at the St. Louis Fed, addresses employees as part of the Bank’s centennial celebration in 2014 and discusses the St. Louis Fed’s influence on
policy during the Great Inflation period of the 1970s.
24 | Annual Report 2017

later, Ted Balbach, who enhanced and expanded
upon Jones’ initiatives.3

“We were the first Bank in the Federal Reserve
System to do academic-style research and try to
use that research to influence thinking on monetary
policy,” Bullard noted.
Under Jones, the St. Louis Fed became the first
Reserve bank to go public with its own viewpoints
and began publishing data and analysis for the public. When the Bank began to use mainframe computers around 1967, McDonnell Douglas provided
computer access for the Research division. In this
era, computer programs were created line by line on
punch cards, which were transported by taxi from
the Bank to McDonnell Douglas for processing.4
The division developed its international reputation
for economic research and monetarist policy views
that remains to this day, and it continues to be
well-known for its publication of data and economic
analysis, including its popular, publicly available
database FRED®.
“The ideas about how to run monetary policy
that came out of here and influenced U.S. policy
also helped influence monetary policy around the
world. This led to lower inflation around the world
and eventually to the inflation targeting era starting
in the 1990s,” Bullard said.

When then-St. Louis Fed President Darryl Francis (left) and then-Research Director
Homer Jones (right) couldn’t convince the Fed’s leadership in Washington that monetary policy was causing the waves of inflation that started in the late 1960s, the two
men took their case to the public.

He added, “There are many different challenges
today in monetary policy than there have been historically, but the basic story remains that research is
not just scribbling on a piece of paper. The ideas can
be profoundly powerful and have huge influence on
real people’s lives.”
E N DNOT E S

For more discussion, see Wheelock, David. Lessons from
a Maverick: How the St. Louis Fed Helped Shape the
Nation’s Monetary Policy. The Federal Reserve Bank of
St. Louis Annual Report 2013.

The misery index can be constructed using FRED®
economic data, retrieved from https://fred.stlouisfed.org.

See Bordo, Michael D.; and Schwartz, Anna J. Monetary
Economic Research at the St. Louis Fed during Ted
Balbach’s Tenure as Research Director. The Federal
Reserve Bank of St. Louis Review, September/October
2008, Vol. 90, No. 5, pp. 499-504.

See the St. Louis Fed Centennial Timeline, retrieved
from https://fraser.stlouisfed.org/timeline/st-louis-fedcentennial.

Staff regularly meet with President James Bullard in The Ted Balbach Conference Room
at the St. Louis Fed to discuss issues related to monetary policy. The conference room—
named after the former research director whose leadership helped define the Bank’s
research reputation—also serves as the location for seminars by economists from the
Bank and from around the world.

stlouisfed.org | 25

“Not that long ago, the workings and decisions of the FOMC were
kept behind closed doors. It wasn’t until the 1990s that it began to
officially announce its actions and any changes in the policy rate. In
the 2000s, as the FOMC worked to contain the financial crisis through
the use of extraordinary monetary policy and lending programs, it
became imperative to better communicate its thinking to financial
markets and the private sector. The Fed has taken unprecedented
steps to improve communications ever since so there are fewer
misunderstandings or surprises about Fed policy, less market
volatility and better macroeconomic outcomes.”
— Cletus Coughlin, Senior Vice President and Chief of Staff to the President

A Push for More Transparency

James Bullard shared some reflections on his first 10 years as Bank president during recent conversations
with staff. The following are excerpts from those discussions.

ACCO M PA N YI NG VI D EO

When I first started at the St. Louis Fed in 1990, the FOMC did not even
make an announcement or release a statement about decisions that had
been made. It left it to financial markets to divine decisions by looking at
trading patterns in short-term, overnight interest rate markets.
In 1994, with the debut of the FOMC statement, an era of evolving transparency began.

Transparency

Over the next 10 years, the statement became more informative, and minutes of each FOMC

Watch online at stlouisfed.org/
annual-report/2017.

meeting more accessible.
It was a good start, but still too opaque with the onslaught of the financial crisis and the
10 years of unconventional monetary policy that followed. Between 2007 and 2012—with
unprecedented decisions that brought the zero lower bound, quantitative easing, Operation Twist (extending the average maturity of Treasury securities), liftoff and unwinding the
balance sheet—FOMC communications became central to effective monetary policymaking.
Markets and the public needed to understand the central bank in real time. It was a major
and important journey.
In April 2011, Chairman Ben Bernanke held the first press conference after an FOMC
meeting. Press conferences are timed with the FOMC’s SEP, which is released four times
a year and has included the dot plot since 2012. In addition, in 2012, the FOMC named an
explicit, numerical inflation target.

26 | Annual Report 2017

DEEPER DIVE
The large size of the FOMC—19 members (seven Board governors
and 12 Reserve bank presidents) when at full strength—helps with
communicating more or less continuously. I think that’s very helpful
in keeping the markets in sync with the Fed. As my predecessor, Bill
Poole, would have said, you don’t want private sector expectations to

Taper Tantrum:
A Communication
Breakdown

get misaligned with FOMC intentions, and you want to keep those
together as much as possible.
While these were monumental steps forward in transparency,
there is still more work to do. In my view, it’s just better policymaking to be communicating effectively with the private sector more or
less all the time. New things are happening in the economy every
day. New data have come out, other central banks are taking action,
there’s new foreign exchange information, or there are political
revolts and upheavals. And the markets want to know how such
changes will affect Fed policy.
I think we could start with a press conference at every meeting.
Press conferences are currently held after only four of the eight
regularly scheduled meetings. As a result, meetings that are not followed by a press conference tend to be thought of as ones at which
taking an important action is unlikely. Consequently, the risk is to

The “taper tantrum” of 2013 is an example
of what can happen when communication
signals between the Fed and financial markets
get crossed.
In the spring of 2013, QE3 was in full swing;
the Fed was purchasing $85 billion per month
in longer-term Treasuries and mortgage-backed
securities. As the economy continued to slowly
recover, questions began to arise as to when
the Fed would begin to reduce, or taper, the QE
program. To date, the FOMC’s messaging on this
topic had remained steady, and financial markets
remained relatively calm.

make moves that are calendar-based and to miss out on some moves
that the data would support simply because no press conference is
scheduled. If there were a press conference after every meeting, then
all meetings would be “ex ante” identical—the FOMC could make
a decision if it’s appropriate at that particular meeting. (For more

“The taper tantrum was a
communications problem, and that
is its great lesson for us as monetary

discussion on state-contingent versus calendar-based policy, see the

policymakers. It was all about

section “QE3: Data-Driven, Not Date-Driven” in this annual report.)

communicating future policy action,

In addition, improvements could be made regarding the FOMC’s
forecasts of macroeconomic variables published each quarter in the
SEP. The SEP has a checkered history, and it can be confusing and

not about actual changes in policy.”
— James Bullard, President and CEO

misleading. The main problem is that the forecasts are unconnected
and unattributed. Currently, each FOMC participant submits his
or her projections for real output growth, the unemployment rate,
overall inflation, core inflation and, as of 2012, the future path of the
target federal funds rate. The Fed publishes summaries of the projections without attribution to individual participants.
Furthermore, the sets of forecasts that the FOMC participants
submit are based on various models and policy assumptions. Each
projection is based on the optimal policy from that person’s point
of view, not necessarily what the FOMC is actually going to do. The
report does not reflect any sort of FOMC consensus, and it does not
capture statistical uncertainty or a range of possible outcomes. This
contributes to even greater interpretation problems.
So, while the SEP provides useful information, communications
about how the FOMC views the economy could be improved. Other

Then communications about the future of
the program began to emerge. In May, Fed
Chairman Ben Bernanke indicated during his
testimony before the Joint Economic Committee
that the Fed could begin to taper if and when
economic conditions warranted. A few weeks
later, at its regular June meeting, the FOMC
voted to continue QE3 at the pace of $85 billion
per month. But Bernanke discussed a tentative
future tapering time frame during the postmeeting press conference.1
Markets reacted abruptly: Bond and stock
prices tumbled, and market volatility surged. This
period became known as the “taper tantrum.”
Continued on next page
stlouisfed.org | 27

DEEPER DIVE
Continued from previous page

“The essential decision by the FOMC at that
meeting was to do nothing, but that left the
chairman to explain at the press conference what
the future strategy would be with respect to the
pace of asset purchases,” James Bullard said.
“I dissented at the June meeting because I
didn’t think that this was a good way to proceed,
and I thought it would come off hawkish,” he
recalled.2
In September, the FOMC surprised markets in
the other direction. Markets expected the FOMC
to announce that it would begin tapering. When
the FOMC made no such announcement, some
of the financial market effects following the
June meeting were then reversed.
When the FOMC formally decided in December to begin tapering, the decision was met with
very little market reaction. The actual reduction
in the pace of asset purchases throughout 2014

central banks put this out as a collective committee staff forecast,
and that’s the way we could do it as well.
One way would be to replace the SEP with a quarterly monetary
policy report that better explains the FOMC’s actions and projections
on a regular basis. It would include a staff forecast as a baseline
of what the Fed expects, and FOMC participants could then give
their views/forecasts relative to that baseline. The report could also
provide more color commentary on various developments on the
economy. The Bank of England was a trailblazer in this area with its
inflation report. Many other central banks also do this.
I also think we could do more on policy rules in a quarterly monetary policy report. Such a report could provide a more complete
discussion of how the FOMC views the current state of the U.S.
economy and its expectations going forward. It could include a
regular discussion of various monetary policy rules and explain why
any deviations from those rules seemed appropriate at that time.
The FOMC has already been using policy rules for many years in
its internal deliberations, so I don’t see anything that would inhibit
the Fed from talking in terms of policy rules and deviations from
policy rules.

went smoothly, and the FOMC ended QE3 in
October 2014.3
“The taper tantrum was a communications
problem, and that is its great lesson for us as
monetary policymakers,” Bullard said. “It was
all about communicating future policy action,
not about actual changes in policy.”
E N DNOT E S

See Bernanke, Ben. FOMC press conference,
June 19, 2013.

See Federal Reserve Bank of St. Louis. President
Bullard’s Comments on Recent FOMC Actions, press
release from June 21, 2013.

See Bullard, James. A Tame Taper, a presentation
delivered in Little Rock, Ark., May 16, 2014.

28 | Annual Report 2017

A DDITION A L R ESOU R CES

“The Policy Rule Debate: A Simpler Solution” (President’s Message:
The Regional Economist, First Quarter 2017)
“A Quarterly Monetary Policy Report Would Improve Fed
Communications” (President’s Message: The Regional Economist,
April 2013)
FOMC Speak: A repository of speeches, testimony, interviews and
commentary by FOMC participants (Federal Reserve Bank of
St. Louis website)

Top left: Nikki Jackson, senior vice president and regional executive of the Louisville
Branch, participates in the National Teach Children to Save Day for financial literacy
month in April 2017.
Top right: Bill Emmons (left) and Ray Boshara (right) interview with Bloomberg radio
in 2016. Emmons is the lead economist for the Center for Household Financial Stability
(HFS) at the St. Louis Fed, and Boshara is its senior adviser and director.
Middle: St. Louis Fed President James Bullard and Senior Vice President of Public
Affairs Karen Branding tour Illinois-based Dot Foods’ warehouse with Dot CEO Joe
Tracy and other executives during an outreach visit to the northern part of the Fed’s
Eighth District in 2017.
Bottom: Robert Hopkins, senior vice president and regional executive of the Little
Rock Branch, engages with bankers at an outreach event in Arkansas in 2018.

“Along with others on the FOMC, Jim Bullard was a proponent
of adopting an explicit inflation target in the U.S. years before it
was officially implemented in 2012. He was part of a group of Fed
presidents who helped craft the language that led to the FOMC’s
‘Statement on Longer-Run Goals and Monetary Policy Strategy,’ which
is where the inflation target is stated. In addition, Bullard was, and
continues to be, an advocate of defending the 2 percent target from
the high side and the low side.”
— Christopher Waller, Executive Vice President and Director of Research

The Road to an Inflation Target

James Bullard shared some reflections on his first 10 years as Bank president during recent conversations
with staff. The following are excerpts from those discussions.

The U.S. lagged many other central banks around the world in adopting
ACCO M PA N YI NG VI D EO

an explicit inflation target. The FOMC didn’t name one until January 2012.
This was a step toward increased Fed transparency and something that I
and others had long advocated.
The European Central Bank is an example of a central bank that has long had an infla-

The Mystery of
Inflation?

tion target. In fact, the ECB has had one since it was established in 1998. There were many

Watch online at stlouisfed.org/
annual-report/2017.

an inflation target—e.g., what the number would be, the horizon over which the central

years during the run-up to the ECB’s establishment to decide various aspects of adopting
bank would be expected to achieve that number, the index used to measure inflation and
the exact wording for the target.
Ben Bernanke, who became Fed chairman in 2006, had wanted the FOMC to implement an explicit inflation target for the U.S. Many others on the FOMC were also supportive of an inflation target. There was some talk that the FOMC would simply need to
put a number in the post-meeting statement. Others, including me, thought this did not
go far enough, that other issues related to naming a specific number also needed to be
addressed—i.e., the issues that were the focus of discussion in establishing the ECB.
To that end, in early 2011 an ad hoc group of Federal Reserve bank presidents assembled—five of us—whose views on monetary policy spanned the spectrum of opinion on the
FOMC. Rather than putting a number in the FOMC’s post-meeting statement, we drafted

30 | Annual Report 2017

a separate one-page statement that not only would

formal process of the meeting, which is how we got

name an inflation target for the U.S., but would

an explicit inflation target. Under current protocol,

touch on other important issues. It said that the

the FOMC revisits the statement every January.

FOMC, given the Fed’s dual mandate, would follow

Chairman Bernanke’s goal of naming an official

a balanced approach between the real side of the

inflation target for the U.S. was achieved, and the

economy (e.g., employment, output) and the nom-

FOMC’s diverse views, collegial approach and disci-

inal side of the economy (e.g., prices). It named an

plined vetting had served it well.

inflation target of 2 percent, and it explained why a
similar target for the employment side of the mandate was not specified. (Monetary policy controls
inflation over the medium to longer run, but it does
not control employment over that horizon.)
The proposed statement was vetted extensively
over several months by other Reserve bank presidents, Chairman Bernanke and other members of
the Board of Governors.
Ultimately, at its January 2012 meeting, the FOMC
adopted a very similar statement as part of the

A DDITION A L R ESOU R CES

“Federal Reserve issues FOMC statement of longer-run
goals and policy strategy” (Board of Governors
of the Federal Reserve System press release from
Jan. 25, 2012; amended in January 2018)
“Inflation Targeting in the USA” (Bullard’s speech
delivered in Chicago, Feb. 6, 2012)
“Recent Actions Increase the Fed’s Transparency”
(President’s Message: The Regional Economist,
April 2012)

In his office at the
St. Louis Fed, President
James Bullard (left)
discusses monetary
policy and macroeconomic issues with
Chris Waller, executive
vice president and
director of research.

stlouisfed.org | 31

DEEPER DIVE

The Fed’s Dual Mandate: Is a Single Better?
At the outset, the Federal Reserve Act of 1913 did

The Fed and other central banks are still guided,

not give the Fed an explicit monetary policy man-

in part, by the Phillips curve in making monetary

date—although the goal in creating the U.S. central

policy. However, the idea hasn’t always held up in

bank was to promote economic and financial stabil-

practice—especially in the stagflation era of the

ity for the nation.

1970s (when unemployment and inflation were

Following the Great Depression and World War II,

high) and in today’s environment (when unem-

Congress passed the Employment Act of 1946, requir-

ployment and inflation are low). This has many

ing the federal government “to promote maximum

monetary policymakers, including James Bullard,

employment, production and purchasing power.”

pointing to the “disappearing Phillips curve.”1
“The evidence since then has accumulated even

In response to the Great Inflation of the 1970s
and ensuing recession, the Full Employment and

more than it already had at the time in the 1970s—

Balanced Growth Act of 1978 (referred to as the

that there was no automatic, permanent trade-off

“Inflation control, or price
stability, is really the

Humphrey-Hawkins

between inflation and unemployment and that you

Act) was introduced,

could keep inflation low and stable without adverse

making the federal gov-

consequences for the real economy in the medium to

ernment responsible for

the long run,” Bullard said.

paramount goal of monetary

achieving full employ-

policy—or should be—because

ment and price stability,

real economy temporarily, he noted, they cannot

that’s really the best that the

among other goals.

control real variables like employment, output

monetary authority can do to

In 1977, Congress

While monetary policymakers can influence the

growth, consumption growth and investment over

amended the Federal

the medium term. “These are going to be defined

Reserve Act, directing

ultimately by markets interacting, by supply and

maximum employment and

the Fed to “increase

demand all across the economy and by specific

economic growth.”

production, so as to

markets—real decisions by real people,” Bullard

promote effectively

said. “The Fed can’t change that.

promote a healthy economy:

— David Wheelock, Group Vice President
and Deputy Director of Research

“The central bank can control the inflation rate

the goals of maximum
employment, stable

over the medium term, and because of that, I think

prices and moderate

it’d be better to have a single mandate,” he said.

long-term interest rates.” The first two—maximum

“The optimal way to deliver on the dual mandate

sustainable employment and price stability—are

is to pursue low and stable inflation, which in turn

commonly referred to as the Fed’s dual mandate.

helps the real economy.”2

Long before the dual mandate was law, an idea
took hold in the 1950s that there is an inverse relationship between unemployment and inflation. This

EN DN OTES

See Bullard, James. Remarks on the 2018 U.S.
Macroeconomic Outlook, a presentation delivered in
Lexington, Ky., Feb. 6, 2018.

For more information, see Bullard, James. President’s
Message: The Fed’s Dual Mandate: Lessons of the 1970s.
The Federal Reserve Bank of St. Louis Annual Report 2010;
and Wheelock, David. Monetary Policy Minutes: What Is
Monetary Policy? Timely Topics podcast, June 2, 2017.

relationship (named the Phillips curve, for economist A.W. Phillips) suggests that the lower the unemployment rate is, the higher wage growth (i.e., wage
inflation) is likely to be. The theory is that this wage
inflation would then get passed on by firms to customers via higher prices (i.e., price inflation). It was
generally viewed that policymakers could exploit
the trade-off between inflation and unemployment
by setting policy that could raise one variable at the
cost of the other.

32 | Annual Report 2017

Top left: Douglas Scarboro (center), senior vice president and regional executive of the
Memphis Branch, interacts with business and industry leaders at an Economic Club of
Memphis event in 2016.
Top right: Julie Stackhouse, executive vice president for Supervision, Credit, Community Development and the Center for Learning Innovation at the St. Louis Fed, interacts
with students and professionals during the Corporate Finance Conference at Washington University in St. Louis in 2011.
Middle: Branch boards of directors meet regularly to provide insight on the latest
developments in the local economy, which are then shared with the president and
other economists at the Bank. This type of anecdotal information gathering ensures
that the voice of Main Street is represented at the FOMC table in Washington, D.C.
Bottom: David Sapenaro, first vice president and chief operating officer at the St. Louis
Fed, engages with employees at the Bank’s annual town hall event in 2018. Sapenaro
was appointed the Bank’s COO in 2006.

“Like many economists at the St. Louis Fed and throughout the
Federal Reserve System, Jim Bullard has spent his career within
the Fed researching and writing papers to contribute to a better
understanding of the macroeconomy and monetary policy. He has
continued this type of work throughout his time as president. Most
recently, he has explored whether price-level targeting or nominal
GDP targeting might lead to even better outcomes than inflation
targeting, which is the current standard among many central banks.”
— David Wheelock, Group Vice President and Deputy Director of Research

Alternatives to Inflation Targeting

James Bullard shared some reflections on his first 10 years as Bank president during recent conversations
with staff. The following are excerpts from those discussions.

ACCO M PA N YI NG VI D EO

Over the last two decades, central banking around the world has been
primarily focused on inflation targeting as a way to keep inflation low and
stable (although, as I noted earlier, the Fed was relatively late to the party
on establishing an explicit inflation target). Committing to an inflation
target has generally led to good outcomes for inflation and inflation

Life of an
Academic Scholar
Watch online at stlouisfed.org/
annual-report/2017.

expectations. But I have wondered if we could have even better outcomes
going forward.
One of the waves of the future in central banking may be a move to price-level targeting or nominal GDP targeting as a way to conduct monetary policy in an environment
in which policymakers are trying to maintain their inflation target. In many macroeconomic models, these alternative approaches—rather than inflation targeting—are
optimal policy.
After I discussed a paper by economist Kevin Sheedy at a Brookings Institution event
in 2014, I started writing, with co-authors, papers that are versions of the story Sheedy
told in his paper. In particular, I explored models where the optimal policy is nominal
GDP targeting or some variant.
The simplest version is price-level targeting. The idea would be to keep the price level
on a path that would be upward sloping and associated with a central bank’s inflation

34 | Annual Report 2017

target. If the actual price level moved off that path,
monetary policymakers would always be striving to
get back to it. Therefore, under this framework, the

SN A PSHOT IN TIME: From Bullard’s Speech on Jan. 4, 2018

Personal Consumption Expenditures Price Index

goal would be to hit the inflation target on average

160
PCE Price Index

inflation that are higher or lower than the inflation
target would be allowed as needed. This contrasts
with inflation targeting, which allows misses on
inflation and does not do anything about them.
Nominal GDP targeting is related to price-level
targeting, but the former takes into account both

Index (Jan-1995 = 100)

over the medium term, meaning that periods of
150

4.6%
gap

2% Annual Inflation
140
130
120

inflation and real GDP growth.
I have argued that de facto price-level targeting occurred from 1995 to 2012 in the U.S. In
recent years, however, the U.S. has fallen off the

110
100
Jan-1995

Jan-2000

Jan-2005

Jan-2010

Jan-2015

price-level path because inflation has mostly been
running below the 2 percent target since 2012. The
actual price level (measured using the personal
consumption expenditures price index) is currently
between 4 percent and 5 percent lower than the
previously established path. If the FOMC were following a price-level targeting approach, this would

Price-level targeting is optimal policy in some macroeconomic models. De facto pricelevel targeting occurred from 1995 to 2012, when the U.S. maintained a 2 percent pricelevel path. Since then, however, the actual price level has been below the previously
established path.
SOURCES: Bureau of Economic Analysis and Bullard’s calculations.

suggest allowing inflation to be above target for
some time to return to that price-level path.
These alternative approaches—price-level
targeting and nominal GDP targeting—could
be an improvement on inflation targeting and
might be a better way to operate, especially in the
low interest rate environment that has the zero
lower bound threatening all the time. This is an
ongoing issue and one that other FOMC participants have also discussed. Of course, it requires
further study and debate, but in my view, adopting one of these alternatives may be a wave of the
future in central banking.

A DD I T I O N A L R E S O URCES

“A Singular Achievement of Recent Monetary Policy”
(Bullard’s presentation delivered in South Bend, Ind.,
Sept. 20, 2012)

Cletus Coughlin, senior vice president and chief of staff to the president at the St. Louis
Fed, delivers a brown-bag lunch-and-learn presentation in 2018 to Bank employees on
the responsibilities of the FOMC and the policy-making process.

“Discussion of ‘Debt and Incomplete Financial Markets’
by Kevin Sheedy” (Bullard’s presentation delivered
in Washington, D.C., March 21, 2014)
“Allan Meltzer and the Search for a Nominal Anchor”
(Bullard’s speech delivered in Philadelphia,
Jan. 4, 2018)

stlouisfed.org | 35

“The financial crisis ultimately changed the nature of how we think
about central banking and how a central bank should conduct
monetary policy at the zero lower bound.”
— James Bullard, President and CEO

Conclusion: Lessons Learned
James Bullard shared some reflections on his first 10 years as Bank president during recent conversations
with staff. The following are excerpts from those discussions.

During the past 10 years, we have learned some important lessons in
managing through the financial crisis and ensuing recovery.
This period underscored the importance of maintaining diverse views on the FOMC
and highlighted the important role the Reserve bank presidents play at the table. My
colleagues (past and present) and I have collectively provided continuity for the Fed—by
striving to bring issues to the forefront, influencing the debate at the FOMC, and helping
to shape monetary policy for the better.
Another reflection from this period is how challenging it has been to encounter
the zero lower bound for the Fed’s policy rate. Earlier in my career, I would not have
described it as a very serious problem, but it has turned out to be a more difficult issue
than many of us appreciated. I thought this issue was something for the 1930s (during
the Great Depression era), but the financial crisis ultimately changed the nature of how
we think about central banking and how a central bank should conduct monetary policy
at the zero lower bound.
Moreover, we have experienced ultralow policy rates globally for much longer than
anyone anticipated. Previously, it would have been surprising to stay at the zero lower
bound for more than two quarters, much less a year. Yet, we remained at a near-zero policy rate in the U.S. for seven years—with Japan and Europe even seeing negative interest

36 | Annual Report 2017

rates. The idea that this would last for so long—way

may originate. It has the potential to come from

beyond ordinary business cycle time—has been a

outside the banking sector, not inside it. The 2007-09

real shock to the global macroeconomics and central

crisis arguably originated outside traditional bank-

banking community.

ing—more specifically, from the nonbank financial

Beyond the policy rate, the 2007-09 crisis made
people reconsider the intersection between the finan-

(investment banking) sector.
As a central bank, we have an opportunity to

cial sector and real economy. We have learned to be

reorient our thinking about these risks to ensure

more understanding of the fact that financial crises

we set the right policy and employ the right level of

can happen and that the modern economy is not

oversight to help mitigate or prevent the potential

protected against these shocks. While such crises are

impacts of future crises. We cannot wait for the next

infrequent, they can be devastating to the economy

crisis to unfold to act.

as a whole when they do occur.
To that end, in my view, there is not enough discussion today about where the next financial crisis

stlouisfed.org | 37

Pivotal Events from Crisis to Recovery: 2007-2010
2007

2008
January 2008 – The FOMC reduces
the target for the federal funds rate
twice during the month, first to 3.50
percent and then to 3.00 percent.

Aug. 9, 2007 – The Libor-OIS spread
rises, escalating fear of bank insolvency.
The spread is interpreted as the market’s
perception of the risk associated with
subprime mortgages spreading to the
broader mortgage market and overall
economy.

December 2007 – The Great Recession
begins, per the National Bureau of
Economic Research.

Sept. 18, 2007 – The FOMC reduces the
target for the federal funds rate from 5.25
to 4.75 percent.

Dec. 12, 2007 – To address pressures
in short-term funding markets, the
Fed establishes a temporary Term
Auction Facility—whereby term funds
are auctioned to depository institutions
against a variety of collateral—and also
establishes swap lines with the European
and Swiss central banks.

Oct. 31, 2007 – The FOMC reduces the
target for the federal funds rate to 4.50
percent.

Dec. 11, 2007 – The FOMC reduces the
target for the federal funds rate to 4.25
percent.

March 18, 2008 – The FOMC reduces
the target for the federal funds rate
to 2.25 percent.
March 24, 2008 – The New York Fed
announces it would provide term
financing to facilitate JPMorgan
Chase’s acquisition of Bear Stearns.
This action prevents Bear Stearns
from filing for bankruptcy and
represents one of the first bank
bailouts of the financial crisis.
April 30, 2008 – The FOMC reduces
the target for the federal funds rate
to 2.00 percent.
July 2008 – An oil-price shock
culminates in nominal crude oil
prices peaking above $145 per barrel.

Sept. 6, 2008 – Fannie Mae
and Freddie Mac—the nation’s
two largest mortgage finance
companies—are placed into
conservatorship to prevent further
disruption in financial markets.
Sept. 15, 2008 – Lehman Brothers
files for Chapter 11 bankruptcy. This
announcement spurs concern in
financial markets around the world.
Sept. 16, 2008 – The Fed authorizes
the New York Fed to lend up to $85
billion to the American International
Group (AIG). The deal implies that
AIG was “too big to fail.”
October 2008 – The FOMC reduces
the target for the federal funds rate
twice during the month, first to 1.50
percent and then to 1.00 percent.
Nov. 25, 2008 – The Fed announces
plans to purchase agency debt
and mortgage-backed securities
over several quarters—the start of
quantitative easing, or QE1.
Dec. 16, 2008 – The FOMC reduces
the target range for the federal
funds rate to zero to 0.25 percent
(the zero lower bound). This occurs
while the U.S. is in its worst financial
crisis since the Great Depression.

Effective Federal Funds Rate
0%

2007

2008
G R E AT R E C E S S I O N

Bullard Responses

38 | Annual Report 2017

April 1, 2008 – Bullard:
Succeeding William Poole, James
Bullard becomes the St. Louis Fed’s
president and CEO. He joined the
Bank in 1990 as an economist in the
Research division.

Nov. 20, 2008 – Bullard:
In “Three Funerals and a Wedding,”
Bullard discusses fiscal policy as a
macroeconomic stabilization tool, a
previously unpopular idea that may
be taking on new life.

2009

March 18, 2009 – The FOMC expands
its large-scale asset purchase program
under QE1. In total, the FOMC says it will
purchase up to $1.25 trillion of mortgagebacked securities, up to $200 billion of
agency debt and up to $300 billion of
longer-term Treasury securities.

2009

Jan. 3, 2009 – Bullard:
In “A Two-Headed Dragon for
Monetary Policy,” Bullard notes that
having an explicit U.S. inflation target
would mitigate two medium-term
risks: a Japanese-style deflationary
trap and 1970s-style inflation.

2010

June 2009 – The Great Recession
ends, per the National Bureau of
Economic Research. The recession
lasted 18 months, the longest of any
recession since World War II.

July 21, 2010 – The Dodd-Frank Wall
Street Reform and Consumer Protection
Act is enacted. The law is adopted to
regulate financial markets and protect
consumers in the wake of the financial crisis.

Nov. 3, 2010 – The FOMC begins
QE2 by saying that it intends to
purchase $600 billion of longerterm Treasuries by the end of the
second quarter of 2011.

2010

March 22, 2010 – Bullard:
Regarding monetary policy normalization,
Bullard calls for a last-in, first-out approach.
When the normalization debate ensues,
he states his preference to adjust the Fed’s
balance sheet by removing QE prior to
raising the policy rate.

2011

July 29, 2010 – Bullard:
In “Seven Faces of ‘The Peril,’”
Bullard warns about the U.S. falling
into a Japanese-style deflationary
trap. To avoid that situation, he calls
for the FOMC to implement a new
phase of its QE program.
stlouisfed.org | 39

Pivotal Events from Crisis to Recovery: 2011-2017
2011

2012

2013

2014

April 27, 2011 – Fed Chairman Ben
Bernanke holds the first-ever press
conference following an FOMC meeting.
These press conferences allow the
chairman to discuss the FOMC’s policy
decisions and economic projections in
more depth.

Aug. 5, 2011 – The U.S. credit rating is
downgraded for the first time in history.
This is a symbolic blow to the world’s
most pre-eminent economy.

Jan. 25, 2012 – The FOMC adopts an
explicit inflation target of 2 percent,
based on headline inflation, and
introduces the “dot plot,” which shows
participants’ projections for the policy
rate path.

Sept. 21, 2011 – The FOMC votes
to extend the average maturity of
its Treasury securities (“Operation
Twist”). To put downward pressure on
longer-term interest rates, the Fed will
purchase longer-term Treasuries using
proceeds from selling or redeeming
shorter-term Treasuries.

2011

Bullard Responses

June 24, 2013 – Financial markets
experience significant turmoil due to
uncertainty about the Fed’s timing of
scaling back bond purchases, a reaction
known as the “taper tantrum.”

Sept. 13, 2012 – The FOMC votes to
begin an open-ended QE program—
the start of QE3. The program
will continue until substantial
improvement in the labor market
outlook has been achieved.

2012
Jan. 13, 2012 – Bullard: In “Death
of a Theory,” Bullard discusses fiscal
policy’s limited effectiveness in
business cycle stabilization.
March 23, 2012 – Bullard: In a speech,
Bullard calls for the FOMC to publish
a monetary policy report similar to
other central banks. He says that such
a report could contain a more fulsome
discussion of the current state of the
U.S. economy and the outlook.

Dec. 18, 2013 – The FOMC announces
that it will begin “tapering,” or reducing
the pace of asset purchases, in further
measured steps at future meetings,
depending on underlying economic data.

2013
June 19, 2013 – Bullard: At the FOMC
meeting, Bullard dissents for the first time
since becoming St. Louis Fed president.
He dissents, in part, because he thinks
announcing a plan for reducing the
pace of asset purchases under QE3 is
inappropriately timed, given recent data
and changes to the outlook.
Aug. 14, 2013 – Bullard: While providing an
update on the tapering debate, Bullard calls
for a press conference after every FOMC
meeting. Currently, press conferences are
held after every other meeting.
Nov. 21, 2013 – Bullard: In “The Notorious
Summer of 2008,” Bullard looks back at the
macroeconomic situation in 2008. He says
that during the summer of that year, a case
could still be made that the U.S. economy
would muddle through the crisis.

40 | Annual Report 2017

Feb. 3, 2014 – Janet Yellen
becomes chair of the Board
of Governors of the Federal
Reserve System. Prior to that,
she was vice chair of the Board
of Governors.
Oct. 29, 2014 – The FOMC
announces that it will
conclude QE3.

2014
March 21, 2014 – Bullard:
At the Brookings Institution,
Bullard discusses a paper in
which the optimal monetary
policy is nominal GDP targeting.
This prompts him to write
papers that have nominal GDP
targeting or price-level targeting
as optimal policy, which he calls
a possible wave of the future in
central banking.

2015

2016

2017

LEGEN D

Effective Federal Funds Rate
March 15, 2017 – The FOMC raises the
target range for the federal funds rate to
0.75 to 1.00 percent.
June 14, 2017 – The FOMC raises the
target range for the federal funds rate to
1.00 to 1.25 percent and announces plans
to gradually reduce the Fed’s balance
sheet. This reduction would occur
once normalization of the level of the
federal funds rate is well underway. The
announcement is interpreted as a move
by the Fed to increase transparency
around a future policy action in an effort
to avoid another taper tantrum.
Sept. 20, 2017 – The FOMC announces
that it will begin gradually reducing the
size of the Fed’s $4.5 trillion balance
sheet in October.
Jan. 20, 2016 – Crude oil prices fall
below $27 per barrel amid financial
market concerns and a global oil
supply glut.

Dec. 16, 2015 – The FOMC raises the
target range for the federal funds
rate to 0.25 to 0.50 percent—the
so-called “liftoff.” This is the first step
in the FOMC’s process of normalizing
monetary policy.

2015

Dec. 13, 2017 – The FOMC raises the
target range for the federal funds rate
to 1.25 to 1.50 percent, representing the
third rate hike in 2017.

Dec. 14, 2016 – The FOMC raises the
target range for the federal funds rate
to 0.50 to 0.75 percent.

2016
Jan. 14, 2016 – Bullard: At a presentation
in Memphis, Tenn., Bullard discusses the
decline in oil prices and the effect on the
economy.
June 17, 2016 – Bullard: In an
announcement, Bullard explains the
St. Louis Fed’s new characterization of
the U.S. economic outlook: Instead of
assuming the economy will converge
to a single, long-run outcome, the new
approach to near-term projections
assumes the economy could visit a
set of possible regimes.

NOTE: The timeline ends in 2017.
Jerome Powell becomes chairman of
the Board of Governors of the Federal
Reserve System on Feb. 5, 2018.

2017
Jan. 12, 2017 – Bullard: At a presentation in New
York, Bullard reflects on whether the Fed should
begin reducing the size of its balance sheet
(which had increased substantially under QE)
now that the policy rate has been increased.
Dec. 1, 2017 – Bullard: At a presentation in Little
Rock, Ark., Bullard discusses the flattening U.S.
yield curve and the risk of yield curve inversion.
He says that, with inflation below the Fed’s
target, it is unnecessary to push monetary policy
normalization to such an extent that the yield
curve inverts.

stlouisfed.org | 41

“I think it is incumbent on the Main Street component of the Fed …
to represent Main Street America the way it was intended in the original
Federal Reserve Act. I felt that the [financial] crisis actually brought
out the role of the regional Federal Reserve banks pretty extensively.”
— James Bullard, President and CEO

Beyond the Role of FOMC
Policymaker: Reserve Bank CEO
In looking back at the past 10 years, James Bullard recounted how the
ACCO M PA N YI NG VI D EO

financial crisis demonstrated the importance of the Fed’s decentralized
structure that includes three distinct but complementary components:
the Board of Governors in Washington, D.C.; a Federal Reserve bank in
New York City, long regarded as the nation’s financial capital; and 11 other

Voice of Main Street
Watch online at stlouisfed.org/
annual-report/2017.

regional Reserve banks to represent the voice of Main Street across the
rest of the nation.1
As the president and CEO of the Federal Reserve Bank of St. Louis, Bullard oversees the
Eighth Federal Reserve District.
“I think it is incumbent on the Main Street component of the Fed to push back against
its Washington and Wall Street counterparts, to represent Main Street America the way it
was intended in the original Federal Reserve Act,” Bullard said. “I felt that the crisis actually brought out the role of the regional Federal Reserve banks pretty extensively.”
In addition to providing crucial economic input from their respective districts as part of
FOMC monetary policymaking, the Fed’s regional Reserve bank presidents also serve as the
CEOs for their respective institutions. Reporting to a board of directors, they are responsible for establishing the direction of their banks, achieving short- and long-term objectives,
and running efficient operations.
Upon becoming president and CEO of the St. Louis Fed on April 1, 2008, Bullard went
from having eight employees reporting to him as deputy director of research for monetary
analysis to overseeing an institution of more than 800 employees, with headquarters in
St. Louis and branch locations in Little Rock, Ark.; Louisville, Ky.; and Memphis, Tenn.

42 | Annual Report 2017

DEEPER DIVE
He acknowledged the importance and benefit of
having a very experienced senior management team
already on deck, particularly as he took over the

Bank Supervision and
Monetary Policymaking

reins amid the country’s escalating financial crisis
and a time of dramatic regulatory and technological changes. “The executive team was very strong,”
Bullard said. “We were in pretty good shape from a
management perspective, even though I was new.”
Bullard and his senior team didn’t want the
St. Louis Fed to be simply a good institution. To
improve the Bank’s performance over time, they
believed it should be run like a top-performing busi-

The Fed supervises and regulates all bank holding companies,
savings and loan holding companies, state-chartered banks that are
members of the Federal Reserve System, and any nonbank that is
designated as a systemically important financial institution by the
Financial Stability Oversight Council.
Supervising banks helps the Fed better perform its critical functions as a central bank; likewise, the Fed’s expertise in monetary
policymaking contributes to its being a more effective supervisor.

ness, with a passion for excellence, innovation and

“Monetary policy-

service to the Federal Reserve’s Eighth District.

makers depend on

“The basic idea was for the Bank to better understand the needs of the Federal Reserve System, as
well as the environment in which the nation’s central

The ability to have “boots
on the ground” for supervising
banks at all levels provides the

information provided

Fed with the opportunity to

by bank supervisors

glean deeper insights into the
health of the financial system

bank is operating, and then to develop our own

about banking market

talent or find the areas where we can contribute,”

conditions … when

Bullard said. “We have found places where we can

determining the appro-

debate in 2010, there was dis-

priate path of policy.”

cussion about changing the way

and are able to contribute, and that has led to significant expansion here at the St. Louis Fed.”
Examples of the growth, innovation and opportu-

— Julie Stackhouse, Executive
Vice President, Supervision

nities resulting from those efforts include:
• The St. Louis Fed continued to expand its sup-

and local economies.
“During the Dodd-Frank Act

the U.S. regulatory structure
worked,” James Bullard said.
“Many proposals were on the

table, but my feeling was that you needed to keep the Fed involved

port for the U.S. Treasury via the Reserve Bank’s

in regulation, because otherwise, monetary policymakers would lose

longtime role as the official Treasury Relations

touch with the nature of financial institutions and how important

and Support Office, and its 2014 designation as a

they can be to the macroeconomy.”

“core” Reserve bank to support the Treasury via

As an example, Bullard cited what happened in the United King-

the fiscal agent consolidation (FAC). As part of the

dom during the financial crisis. In the late summer of 2007, amid the

FAC, seven business lines transitioned from other

freeze in global money market liquidity, there was a run on Britain’s

Reserve banks to the St. Louis Fed.

fastest-growing mortgage lender, Northern Rock.
At that time, the U.K. financial services industry was overseen by the

• The St. Louis Fed’s Supervision division spearheaded a multiyear Fed System-wide effort to

Financial Services Authority (FSA), which had been established in 2000

revamp and modernize the curriculum and

after banking oversight was separated from the Bank of England.1

technology used to train examiners of community

“When there was a run on Northern Rock, the Bank of England

banks, leading to additional, similar programs for

was at a disadvantage because the regulatory structure had been sep-

large financial institution examiners and con-

arated from the monetary structure,” Bullard said. “This experiment

sumer compliance examiners.

alone shows that you really want the central bank to be intimately

• The St. Louis Fed’s publicly available database
FRED (Federal Reserve Economic Data), coor®

dinated by the Research division, enjoyed rapid
growth and global recognition as it topped the
half-million mark in data series in 2017.
• The St. Louis Fed’s Economic Education team

involved in bank regulation, because there’s a great deal of feedback
between that process and the monetary policy process.”
By 2013, regulatory oversight was returned to the Bank of
England, and the FSA officially shuttered.2
EN DN OTES

See McConnell, Pat. After a Long Line of Financial Disasters, UK Banks on
Regulatory Change. Financial Times, April 8, 2013.

See London Money Market Association. Financial Services Authority
Abolished, April 2013.

gained recognition as a national leader in

economic education and financial literacy, surpassing 1 million enrollments in its online courses

St. Louis Fed Key
Milestones: 2008-2017

and videos for the first time in 2016.
• In 2014, the St. Louis Fed opened its Economy

2008

2011

2012

Museum, which includes close to 100 exhibits and
has drawn visitors from across the country and
around the world.
Diversity and inclusion was another early area of
emphasis: One of Bullard’s first actions upon becoming CEO in 2008 was to launch the St. Louis Fed’s
diversity and inclusion program office.
“I felt it was important to be able to recruit the
workforce of the future, which I think is going to be
a lot more diverse, and is already a lot more diverse,
than what we’ve seen historically around the Bank,”
Bullard said. “In order to do that, we had to move up
the learning curve as an organization and get better
at our cultural competencies.”
Bullard said the Bank’s most challenging areas
of diversity recruitment remain the IT fields and
economics. “We’d like to get better on all kinds of
dimensions on this going forward,” he added.

April 1, 2008 – James Bullard
becomes the St. Louis Fed’s
president and CEO, succeeding
William Poole. Bullard joined the
Bank in 1990 as an economist in
the Research division.
Nov. 21, 2008 –
The St. Louis Fed wins
the Missouri Quality
Award, the state’s
official award for
business excellence.
Selection criteria
include strengths in
leadership, strategic
planning, and customer
and market focus.

Sept. 12, 2011 – The St. Louis
Fed launches Dialogue with
the Fed, an evening lecture
series for the general public.
Delving into key economic
issues of the day, the first
lecture is “Lessons Learned
from the Financial Crisis.”

One of his top moments as CEO came in 2016
when the St. Louis Fed was designated as St. Louis’
top workplace among large companies. The awards
were sponsored by the St. Louis Post-Dispatch and
were based on employee surveys.
“I felt very gratified by that, and I felt like it said
a lot about our employees and our workplace,”
Bullard said.
E N DNOT E

For more background on the Fed’s regional structure, see
Bullard, James. The U.S. Economy: A Report from Main
Street, a presentation delivered in Memphis, Tenn.,
Feb. 18, 2010.

The St. Louis Fed’s Julie Stackhouse, executive vice president for Supervision, Credit, Community Development and the Center for Learning
Innovation, Don Schlagenhauf, economist, and Carlos Garriga, vice
president and economist, discuss the economics of homeownership
as part of the Bank’s Dialogue with the Fed public lecture series.
44 | Annual Report 2017

2013

May 23, 2013 – The St. Louis
Fed opens its Center for
Household Financial Stability.
The Center conducts research
and organizes forums locally
and nationally to address the
balance sheets of struggling
American families.

2014

2015

2017

April 28, 2014 – The U.S.
Treasury designates the
St. Louis Fed as a “core”
Reserve bank to support its
cash management, accounting,
collateral and enterprise
functions.

Sept. 22, 2014 – The St. Louis
Fed opens its Economy
Museum to the public. This
interactive and free museum
is dedicated to increasing
financial literacy and economic
education.

2013
Oct. 3, 2013 – The St. Louis
Fed hosts the first Community Banking in the 21st
Century research and policy
conference. Sponsored by
the Federal Reserve System
and Conference of State Bank
Supervisors, this annual event
gathers bankers, academics
and regulators to discuss the
latest findings on community
banking.

2016

Nov. 16, 2014 – The St. Louis
Fed commemorates its
centennial year. The Bank
chronicles its birth and what
lies ahead for the “maverick”
of the Fed system in its 2013
annual report.

D I S C O V E R E C O N O M I C H I S T O R Y | S T. L O U I S F E D

Oct. 22, 2015 – FRASER®
(Federal Reserve Archival
System for Economic
Research) reaches a
milestone of more than a
half million archival items.
A digital library of U.S.
economic, financial and
banking history, FRASER
provides the public with free
access to data and policy
documents from many
institutions, particularly the
Federal Reserve System.

June 24, 2016 – The St. Louis
Fed is ranked the No. 1 Top
Workplace
in St. Louis
(large-employer
category) by
the St. Louis
Post-Dispatch.
The Bank’s
culture, work-life offerings and
employee-led resource
groups are featured.

Oct. 19, 2016 – The Bank’s
Econ Lowdown teacher portal
crosses the 1 million threshold
in online enrollments for K-12
educational courses and videos
on economics and financial
literacy.

Left: Kathy Paese, executive vice president of the Treasury division at the St. Louis Fed and Treasury Relations and Support Office
product manager, addresses her Treasury division colleagues at an employee event.
Middle: High schoolers compete in the trading pit exhibit at the Economy Museum, inside the St. Louis Fed.
Right: Mary Suiter, assistant vice president, directs the Economic Education department at the St. Louis Fed, which provides free
economic education and financial literacy materials for use in K-12 and college classrooms and beyond.

Sept. 9, 2017 – The St. Louis
Fed’s signature economic
database FRED® (Federal
Reserve Economic Data)
tops the 500,000 mark in
data series. The database
began in 1991 as a dial-up
electronic bulletin board
with 30 data series. Today,
its more than half a million
data series are accessed
online by users worldwide.
Dec. 3, 2017 – The Louisville
Branch of the St. Louis
Fed marks its centennial.
Historic photos are available
in FRASER. The Memphis
Branch marks its centennial
in September 2018, and
the Little Rock Branch
celebrates its centennial in
January 2019.

Our People.
Our Work.
The Federal Reserve Bank of St. Louis
promotes a healthy economy and financial
stability. How do we do it? The following
figures from the past year offer a window
into the St. Louis Fed through our people
and work.
All numbers are as of Dec. 31, 2017, unless otherwise noted.

Above: Serving on the St. Louis Fed’s student board of directors
gives high school seniors an opportunity to learn about the U.S.
central bank.
Top right: Meagan Bonnell, senior learning tech designer in the
Center for Learning Innovation, joins other employees at the
Bank’s annual town hall meeting.
Bottom: St. Louis Fed employees support the city’s PrideFest
event celebrating the LGBTQ+ community.

46 | Annual Report 2017

OUR PEOPLE

1,373

staff members, the majority located at
the District’s headquarters in St. Louis,
with branches in Little Rock, Louisville
and Memphis.

100

perfect score for a second straight year in
the Human Rights Campaign’s Best Places
to Work Corporate Equality Index, a national
benchmarking tool for policies and practices
pertinent to LGBTQ+ employees.

new students appointed to the St. Louis
Fed’s student board of directors.

college and seven high school students
served as interns for the Bank.

#10

ranking by DiversityInc in its 2017
Top Regional Companies list.

Left: Mike Renfro,
senior vice president and general
auditor, volunteers
as an employee
ambassador in
the St. Louis Fed’s
Economy Museum.
Right: Mark Bayles,
senior economic
education specialist,
leads students in
using FRED’s economic forecasting
game FREDcast®,
which allows
players to compete
in predicting the
value of economic
variables.

SAFETY AND SOUNDNESS

ECONOMIC RESEARCH

125

35 million

566,993

1.13 billion

2.5 million

Top 5%

state member banks and 485 bank and savings and loan holding
companies supervised by the St. Louis Fed.

currency notes inspected and deemed fit for circulation.

3,041

suspect counterfeit notes withdrawn from circulation.

$36.5 million

in improper payments identified by the St. Louis Fed in its role as
fiscal agent to the U.S. Treasury and its Do Not Pay program, helping
federal agencies eliminate payment error, waste, fraud and abuse.

29,481

hours spent by internal auditors reviewing St. Louis Fed operations.

page views of the St. Louis Fed’s research
site by people in 192 countries.

economic research items from around
the world that anyone can access for
free via IDEAS.2

507,627

data series in Federal Reserve Economic Data,
better known as FRED®—the St. Louis Fed’s
economic database—available online.

128,282

page views of GeoFRED®, our geographical
economic data tool that allows users to
transform data in FRED to create and
share maps by geographic category and
time frame.

items in FRASER®, the St. Louis Fed’s
publicly available, historical digital library,
with materials dating from 1791 to 2017.

ranking for James Bullard on RePEc
in a number of categories, including
the h-index.3

ranking in research productivity for
the St. Louis Fed among all research
departments at central banks worldwide.
#37 among all U.S. research
institutions.
#69 among all research
institutions worldwide.

1 Total is for 2017 federal government fiscal year.
2 IDEAS is the world’s largest bibliographic database dedicated to economics. This service, provided by RePEc (Research Papers in
Economics at https://ideas.repec.org), is hosted by the St. Louis Fed’s Research division.
3 The h-index, or Hirsch index, is a compound measure of publications and citations used to highlight research productivity.

stlouisfed.org | 47

Left: Kim Thomas,
automation specialist in
Support Services, and
her mother participate
in Bring Your Parents to
Work Day.
Right: Economist
Paulina RestrepoEchavarria records a
Timely Topics podcast
about her research
on the propensity of
oil-rich developing
countries to default on
their sovereign debt.

PUBLIC OUTREACH

20,069

84%

2,705

people attended our public dialogue and other outreach events in
St. Louis, Little Rock, Louisville and Memphis.

students and their chaperones from 75 area schools visited the
St. Louis Fed’s Economy Museum.

18,080

bankers, regulators and other industry participants joined call-in and
in-person St. Louis Fed information sessions held on timely financial
and regulatory developments.

485,000+

students were reached through educators who attended St. Louis Fed
economic education programs.

1.2 million

student enrollments in the St. Louis Fed’s Econ Lowdown online
economic education and financial literacy courses and videos.

48 | Annual Report 2017

of inner-city, majority-minority and all-girls high schools across
the Fed's Eighth District accessed the St. Louis Fed’s financial
literacy programs.

awards for Econ Lowdown.
Two Excellence in Financial Literacy Education Awards from
the Institute for Financial Literacy.
Eight Curriculum Awards from the National Association of
Economic Educators.

9,933

people signed up for 41 workshops, conferences, forums and other
events led by our Community Development department to promote
economic resilience and mobility for low- and moderate-income and
underserved households and communities across the District.

Top Left: Terrance
Gaddy, learning technology designer in Supervision, explains his work as
part of the Bank’s
We Are Central campaign, which educates
the public about the Fed.
Top Right: Bank volunteers pack supplies at
an area food bank.
Bottom Right: Cassie
Blackwell, vice president in the Treasury
division, and Luis Lentijo, senior recruiter in
Human Resources, lend
their support to the
Bank’s Ally campaign,
which is focused on
supporting a diverse
and inclusive culture.

C O M M U N I C AT I O N S A N D
SOCIAL MEDIA

8,758

LinkedIn followers and 7,769 Facebook followers.

238,532

page views for The FRED Blog.

76,855

followers on Twitter handle @stlouisfed.
Listed as one of TraderLife’s 10 Trading Twitter Accounts
to Follow in 2018.
Named one of TheStreet’s 15 of the Best Finance Twitter
Accounts to Follow.
Listed as one of Business Insider's 125 Most Important Finance
People You Have to Follow on Twitter.

437,361

page views for On the Economy blog.
Ranked #19 in Top 75 Bank Blogs by Feedspot.

C O R P O R AT E C I T I Z E N S H I P

119,340

$38,941

149

9,861

$243,142

pounds of cash shredded and composted
after being deemed no longer fit for
circulation.

tons of waste recycled or composted—
saved from landfills.

donated by Bank employees to local
United Way campaigns.

raised by employees to help support food
banks and feeding programs for the needy
in the St. Louis area.

school items donated by employees to
the Back-to-School Supply Drive to benefit
area students.

Bank employees volunteered for Teach
Children to Save Day at elementary schools
in the St. Louis area.
stlouisfed.org | 49

Our Leaders.
Our Advisers.
The Federal Reserve’s decentralized structure—
the Board of Governors, the Federal Open Market
Committee and 12 Reserve banks—ensures that the
economic conditions of communities and industries
across the country are taken into account when
deciding monetary policy. Members of our boards
of directors and advisory councils inform the work
of the St. Louis Fed by representing the diverse
perspectives of Main Street across the Eighth Federal
Reserve District.
The following pages list our board members from each of the
four zones of the Eighth District: St. Louis; Little Rock, Ark.;
Louisville, Ky.; and Memphis, Tenn., which is celebrating its centennial year. Members of our advisory councils are also listed, as
are retirees from our boards and our advisory councils, members
of the Bank’s Management Committee, and officers of the Bank.
All lists are current as of March 1, 2018.

Top: Jim McKelvey, a member of the St. Louis Fed board of directors, records a video for the Voices of the Fed campaign, aimed
at educating the public about board members’ roles in providing
a Main Street view to the Bank.
Middle: St. Louis Fed President James Bullard, First Vice President
and COO David Sapenaro and other Bank leaders, together with
Little Rock Branch board members, tour the Baldor Technology
Center at the University of Arkansas—Fort Smith as part of an
outreach tour to the southern part of the Fed’s Eighth District.
Bottom: Sadiqa Reynolds (left), a member of the Louisville
Branch board of directors; Ford employee John Bell (middle); and
James Bullard (right) tour the Ford assembly plant in Louisville,
Ky., as part of an outreach tour to the eastern part of the Fed’s
Eighth District.

50 | Annual Report 2017

The Eighth Federal Reserve District
9I
2B

7G
12L

10J
8H

BOARD OF
GOVERNORS

11K

The Eighth Federal Reserve District is
composed of four zones, each of which

ST. LOUIS

is centered around one of the four

Illinois

cities where our offices are located:

Indiana
LOUISVILLE

St. Louis (headquarters), Little Rock,
Louisville and Memphis. Nearly
15 million people live in the Eighth

Kentucky

Missouri

Federal Reserve District.
Arkansas

Tennessee

LITTLE ROCK
MEMPHIS

Mississippi

stlouisfed.org | 51

St. Louis
B OA R D O F D I R E C TO R S

CHAIR

DEPUTY CHAIR

Kathleen M. Mazzarella

Suzanne Sitherwood

Chairman, President and CEO,
Graybar Electric Co. Inc.
St. Louis

President and CEO, Spire Inc.
St. Louis

Patricia L. Clarke

Alice K. Houston

D. Bryan Jordan

Daniel J. Ludeman

President and CEO, First National
Bank of Raymond
Raymond, Ill.

CEO, HJI Supply Chain Solutions
Louisville, Ky.

Chairman, President and CEO,
First Horizon National Corp.
Memphis, Tenn.

President and CEO, Concordance
Academy of Leadership
St. Louis

Elizabeth G. McCoy

James M. McKelvey Jr.

John N. Roberts III

President and CEO, Planters Bank
Hopkinsville, Ky.

Founder and CEO, Invisibly
St. Louis

President and CEO, J.B. Hunt
Transport Services Inc.
Lowell, Ark.

52 | Annual Report 2017

Thinkstock | RudyBalasko

Little Rock Branch
B OA R D O F D I R E C TO R S

R. Andrew Clyde

Keith Glover

Vickie D. Judy

President, Stone Ward
Little Rock, Ark.

President and CEO,
Murphy USA Inc.
El Dorado, Ark.

President and CEO, Producers
Rice Mill Inc.
Stuttgart, Ark.

CFO, America’s Car-Mart Inc.
Bentonville, Ark.

Jeff Lynch

Robert Martinez

Karama Neal

President and CEO, Eagle
Bank and Trust
Little Rock, Ark.

Owner, Rancho La Esperanza
De Queen, Ark.

COO, Southern Bancorp
Community Partners
Little Rock, Ark.

CHAIR

Millie A. Ward

REGIONAL
EXECUTIVE
Robert Hopkins
Senior Vice President, Little Rock Branch
Federal Reserve Bank of St. Louis

54 | Annual Report 2017

Louisville Branch
B OA R D O F D I R E C TO R S

Patrick J. Glotzbach

Emerson M. Goodwin

Ben Reno-Weber

CEO, The New Washington
State Bank
Charlestown, Ind.

Corporate Regional Director,
KentuckyCare
Paducah, Ky.

Co-Founder and Chief Storyteller,
MobileServe
Louisville, Ky.

Sadiqa N. Reynolds

Randy W. Schumaker

Blake B. Willoughby

President and CEO, Louisville
Urban League
Louisville, Ky.

Former President and Chief
Management Officer,
Logan Aluminum Inc.
Russellville, Ky.

Chairman and President, First
Breckinridge Bancshares Inc.
Irvington, Ky.

CHAIR

Susan E. Parsons
CFO, Secretary and Treasurer,
Koch Enterprises Inc.
Evansville, Ind.

REGIONAL
EXECUTIVE
Nikki Jackson
Senior Vice President, Louisville Branch
Federal Reserve Bank of St. Louis

56 | Annual Report 2017

Memphis Branch
B OA R D O F D I R E C TO R S

Michael E. Cary

David T. Cochran Jr.

J. Brice Fletcher

President, Community LIFT Corp.
Memphis, Tenn.

President and CEO, Carroll
Bank and Trust
Huntingdon, Tenn.

Partner, CoCo Planting Co.
Avon, Miss.

Chairman, First National Bank
of Eastern Arkansas
Forrest City, Ark.

Julianne Goodwin

Carolyn Chism Hardy

Michael Ugwueke

Owner, Express Employment
Professionals
Tupelo, Miss.

President and CEO, Chism Hardy
Investments LLC
Collierville, Tenn.

President and CEO, Methodist
Le Bonheur Healthcare
Memphis, Tenn.

CHAIR

Eric D. Robertson

REGIONAL
EXECUTIVE
Douglas Scarboro
Senior Vice President, Memphis Branch
Federal Reserve Bank of St. Louis

58 | Annual Report 2017

Memphis Branch Centennial
The Memphis Branch of the Federal Reserve Bank of St. Louis represents
75 counties in western Tennessee, eastern Arkansas and northern
Mississippi. Its work began on a seasonal basis, as the Branch provided
discount-window loans and other services to area member banks during
the cotton season. In 1918, it was upgraded to a full-service branch,
officially opening its doors as the second branch of the St. Louis Fed on

100
C O M M E M O R AT I N G

1918 - 2018

Sept. 2 of that year.
The city of Memphis has historically served as a hub for commerce and trade regionally,
nationally and internationally. A century after its founding, the Memphis Branch continues
to focus on the economic needs of the Midsouth.
Today, Memphis Branch staff are responsible for bank supervision, cash services, community development and economic education. The Branch also facilitates the exchange of
economic information to assist in monetary policymaking through its seven-member board
of directors, one-on-one meetings, hosting of events and representation from local business
leaders on our four industry councils.
To learn more about the Memphis Branch, visit stlouisfed.org/memphis.

Left: This building at Jefferson Avenue and
Third Street, shown under construction in
1928, housed the Memphis Branch from
1929 to 1972.
Top: Douglas Scarboro (left), senior vice
president and regional executive, leads
the Memphis Branch of the St. Louis Fed.
The Branch puts a priority on outreach to
business and community leaders in the
Memphis Zone.
Above: Surrounded by award-winning
landscaping and sculptures, the Memphis
Branch’s current building at 200 North
Main Street opened in 1972.
stlouisfed.org | 59

Industry Councils
Council members represent a wide range of Eighth District industries and businesses and periodically report on economic conditions
to help inform monetary policy deliberations.

Agribusiness Council

Health Care Council

Meredith B. Allen

Rhamy Alejeal

President and CEO, Staple Cotton Cooperative Association
Greenwood, Miss.

Owner and CEO, Poplar Financial
Memphis, Tenn.

John Rodgers Brashier

Carla Balch

Vice President, Consolidated Catfish Producers LLC
Isola, Miss.

President and COO, TransMed Systems
Memphis, Tenn.

Cynthia Edwards

Mike Castellano

Deputy Secretary, Arkansas Agriculture Department
Little Rock, Ark.

CEO, Esse Health
St. Louis

Sam J. Fiorello

Cynthia Crone

COO and Senior Vice President, Donald Danforth Plant Science
Center; President, BRDG Park
St. Louis

Research Faculty Member, University of Arkansas for Medical
Sciences, College of Public Health, Department of Health
Policy and Management
Little Rock, Ark.

Edward O. Fryar Jr.
CEO and Founder, Ozark Mountain Poultry
Rogers, Ark.

Dana Huber
Vice President, Marketing/Public Relations, Huber’s Orchard,
Winery & Vineyards, and Starlight Distillery
Borden, Ind.

Wayne Hunt
President, H&R Agri-Power
Hopkinsville, Ky.

Jennifer H. James
Owner, H&J Land Co.
Newport, Ark.

Brett Norman
Director, Sales and Marketing, Mavrx Inc.
Memphis, Tenn.

Chris Novak
CEO, National Corn Growers Association
St. Louis

Tania Seger
Vice President of Finance, North American Commercial
Operations, Monsanto Co.
St. Louis

June McAllister Fowler
Senior Vice President, Communications and Marketing,
BJC HealthCare
St. Louis

Diana Han
Chief Medical Officer, GE Appliances, a Haier company
Louisville, Ky.

Lisa M. Klesges
Professor of Epidemiology, University of Memphis
Memphis, Tenn.

Susan L. Lang
CEO, HooPayz.com
St. Louis

Jason M. Little
President and CEO, Baptist Memorial Health Care Corp.
Memphis, Tenn.

Brandy N. Kelly Pryor
Director, Center for Health Equity, Louisville Metro Department
of Public Health and Wellness
Louisville, Ky.

Robert “Bo” Ryall
President and CEO, Arkansas Hospital Association
Little Rock, Ark.

Alan Wheatley
President, Retail Segment, Humana
Louisville, Ky.

60 | Annual Report 2017

Real Estate Council

Transportation Council

William “Bill” Burns

Bryan Day

Broker/Owner, RE/MAX FIRST
Jeffersonville, Ind.

Executive Director, Little Rock Port Authority
Little Rock, Ark.

Ray Dillon

Michael D. Garriga

Former President and CEO, Deltic Timber Corp.
Little Rock, Ark.

Executive Director of State Government Affairs, BNSF Railway
Memphis, Tenn.

Martin Edwards Jr.

Rhonda Hamm-Niebruegge

President, Edwards Management Inc., REALTORS®
Memphis, Tenn.

Director of Airports, St. Louis Lambert International Airport
St. Louis

Lisa C. Ferrell

Bertram C. “Bert” Hodge

Founder, President and CEO, North Bluffs Development Corp.
North Little Rock, Ark.

General Manager, Heritage Ford
Corydon, Ind.

J.T. Ferstl

Stephanie Ivey

President, Ferstl Valuation Services
Little Rock, Ark.

Director, Intermodal Freight Transportation Institute,
University of Memphis
Memphis, Tenn.

David L. Hardy
Managing Director, CBRE Inc.
Louisville, Ky.

Janet Horlacher
President, Janet McAfee Inc.
St. Louis

Larry K. Jensen

David Keach
President and CEO, Gateway Truck & Refrigeration
Collinsville, Ill.

Mike McCarthy
President, Terminal Railroad Association of St. Louis
St. Louis

President and CEO, Cushman & Wakefield | Commercial
Advisors
Memphis, Tenn.

Judy R. McReynolds

Greg M. Joslin

Toks Omishakin

Senior Broker, Colliers International Arkansas
Little Rock, Ark.

Deputy Commissioner and Chief of Environment and Planning,
Tennessee Department of Transportation
Nashville, Tenn.

Joshua Poag
President and CEO, Poag Shopping Centers LLC
Memphis, Tenn.

Lester T. Sanders
Realtor, Semonin REALTORS®
Louisville, Ky.

Madison C. Silvert
President, The Malcolm Bryant Corp.
Owensboro, Ky.

Chairman, President and CEO, ArcBest Corp.
Fort Smith, Ark.

Brent Stottlemyre
CFO, UniGroup Inc.
Fenton, Mo.

David Tatman
Executive Director, Kentucky Automotive Industry Association;
Associate Vice President, Advanced Manufacturing, Western
Kentucky University
Rockfield, Ky.

stlouisfed.org | 61

Community Depository Institutions
Advisory Council
The members meet twice a year to advise the St. Louis Fed’s president on the credit, banking and economic conditions facing
their institutions and communities. The council’s chair also meets twice a year in Washington, D.C., with the Federal Reserve
chair and governors.

62 | Annual Report 2017

Ann Cowley Wells, Chair

Craig Esrael

Chair and Co-CEO, Commonwealth Bank and Trust Co.
Louisville, Ky.

President and CEO, First South Financial Credit Union
Bartlett, Tenn.

Kevin Beckemeyer

Roy Molitor “Mott” Ford Jr.

President and CEO, Legence Bank
Eldorado, Ill.

Vice Chairman and CEO, Commercial Bank and Trust Co.
Paris, Tenn.

Russell “Rusty” Bennett

Karen Harbin

President and CEO, First National Bank of Clarksdale
Clarksdale, Miss.

President and CEO, Commonwealth Credit Union
Frankfort, Ky.

David Bentele

Gary Hudson

President and CEO, Citizens National Bank of Greater St. Louis
Maplewood, Mo.

President and CEO, Farmers and Merchants Bank
Stuttgart, Ark.

Shaun Burke

Margaret “Marnie” Oldner

President and CEO, Guaranty Bank
Springfield, Mo.

CEO, Stone Bank
Mountain View, Ark.

David Doedtman

Marvin Veatch

President and CEO, Washington Savings Bank
Effingham, Ill.

President and CEO, Jackson County Bank
Seymour, Ind.

Community Development Advisory Council
The council keeps the St. Louis Fed’s president and staff informed about community development in the Eighth District and
suggests ways for the Bank to support local development efforts.

Ivye Allen

Kenneth S. Robinson

President, Foundation for the Mid South
Jackson, Miss.

President and CEO, United Way of the Mid-South
Memphis, Tenn.

Arlisa Armstrong

Margaret S. Sherraden

Area Director, Rural Development, United States Department of
Agriculture (USDA)
Jackson, Tenn.

Founders Professor of Social Work, University of
Missouri–St. Louis; Research Professor, Washington
University in St. Louis
St. Louis

Jay Bassett
Division Chief, Governor’s Dislocated Worker Task Force,
Arkansas Department of Workforce Services
Little Rock, Ark.

Bryce Butler
Managing Director, Access Ventures
Louisville, Ky.

Timothy Lampkin
CEO, Higher Purpose Co.; Co-Founder, Capway
Clarksdale, Miss.

Debra Moore
Director of Administration, St. Clair County, Ill.
Belleville, Ill.

Robert J. Wasserman
Senior Vice President, U.S. Bancorp Community
Development Corp.
St. Louis

Amy Whitehead
Director, Community Development Institute and
Center for Community and Economic Development,
University of Central Arkansas
Conway, Ark.

Cassandra Williams
Vice President and Regional Branch Administrator,
Hope Federal Credit Union
Memphis, Tenn.

Amanda Payne
Assistant Vice President, CRA; Fair Lending Officer,
Independence Bank
Owensboro, Ky.

stlouisfed.org | 63

Federal Advisory Council Representative
The council is composed of one representative from each of
the 12 Federal Reserve districts. Members confer with the Fed’s
Board of Governors at least four times a year on economic and
banking developments and make recommendations on Fed
System activities.

Ronald J. Kruszewski
Chairman and CEO, Stifel Financial Corp.
St. Louis

Retirees
We express our gratitude to those members of the boards of directors and of our advisory councils who retired
over the previous year.

From the Boards of Directors
St. Louis

Susan S. Stephenson
Little Rock

Ray C. Dillon
Charles G. Morgan Jr.

From the Community Depository
Institutions Advisory Council
Jeffrey Dean Agee
Jeff Lynch
Elizabeth G. McCoy
Eric R. Olinger

Louisville

Malcolm Bryant
Mary K. Moseley
Memphis

Roy Molitor Ford Jr.

From the Industry Councils
Agribusiness

Ted Longacre
Real Estate

Mark A. Bentley
Transportation

Mark L. McCloud

64 | Annual Report 2017

From the Community
Development Advisory Council
Rex Duncan
Andy Fraizer
Christie McCravy
Martie North
Deborah Temple

Bank
Management
Committee
James Bullard

David A. Sapenaro

President and CEO

First Vice President and COO

Karl W. Ashman

Karen L. Branding

Cletus C. Coughlin

Roy A. Hendin

Executive Vice President,
Administration and Payments

Senior Vice President,
Public Affairs

Senior Vice President and Chief
of Staff to the President

Senior Vice President, General
Counsel and Secretary

Nikki R. Jackson

Kathleen O’Neill Paese

Julie L. Stackhouse

Christopher J. Waller

Senior Vice President and
Regional Executive,
Louisville Branch

Executive Vice President,
Treasury; and Treasury
Relations and Support Office
Product Manager

Executive Vice President,
Supervision, Credit, Community
Development and the Center
for Learning Innovation

Executive Vice President and
Director of Research

stlouisfed.org | 65

Bank Officers
James Bullard

James A. Price

President and CEO

Group Vice President

David A. Sapenaro

David C. Wheelock

First Vice President and COO

Group Vice President

Karl W. Ashman

David Andolfatto

Executive Vice President

Vice President

Kathleen O’Neill Paese

Cassie R. Blackwell

Executive Vice President

Vice President

Julie L. Stackhouse

Adam L. Brown

Executive Vice President

Vice President

Christopher J. Waller

Timothy C. Brown

Executive Vice President

Vice President

Karen L. Branding

Marilyn K. Corona

Senior Vice President

Vice President

Cletus C. Coughlin

Kent T. Eckert

Senior Vice President

Vice President

Roy A. Hendin

Carlos Garriga

Senior Vice President

Vice President

Robert A. Hopkins

Timothy R. Heckler

Senior Vice President
and Regional Executive

Vice President

Nikki R. Jackson

Vice President

Senior Vice President
and Regional Executive

Katrina L. Stierholz

B. Ravikumar
Senior Vice President

Michael D. Renfro
Senior Vice President

Douglas G. Scarboro
Senior Vice President
and Regional Executive

Matthew W. Torbett
Senior Vice President

Jonathan C. Basden
Group Vice President

Timothy A. Bosch
Group Vice President

Anna M. Helmering Hart
Group Vice President

Amy C. Hileman
Group Vice President

Michael J. Mueller
Group Vice President

66 | Annual Report 2017

Debra E. Johnson

Vice President

Donny J. Trankler
Vice President

Scott M. Trilling
Vice President

James L. Warren
Vice President

Carl D. White II
Vice President

Terri A. Aly
Assistant Vice President

Robyn A. Arnold
Assistant Vice President

Jane Anne Batjer
Assistant Vice President

Alexander Baur
Assistant Vice President

Jennifer M. Beatty
Assistant Vice President

Diane E. Berry

Terri L. Kirchhofer

Mary C. Suiter

Assistant Vice President

Heidi L. Beyer

Catherine A. Kusmer

Brenda Torres

Assistant Vice President

Susan M. Black

Maurice D. Mahone

Bryan B. Underwood

Assistant Vice President

Ray J. Boshara

Carolann M. Marker

Yi Wen

Assistant Vice President

Winchell S. Carroll Jr.

Jackie S. Martin

Ranada Y. Williams

Assistant Vice President

Christopher D. Chalfant

Michael W. McCracken

Dean A. Woolcott

Assistant Vice President

Daniel P. Davis

Christopher J. Neely

Jeffrey S. Wright

Assistant Vice President

Jill Schlueter Dorries

Arthur A. North II

Christian M. Zimmermann

Assistant Vice President

William D. Dupor

Michael T. Owyang

Dana J. Zydlo

Assistant Vice President

William R. Emmons

Christopher M. Pfeiffer

Subhayu Bandyopadhyay

Assistant Vice President

Officer

Kathy A. Freeman

Jennifer L. Robinson

Nicholas C. Clark

Assistant Vice President

Officer

James W. Fuchs

Lili Saint Christopher

Anthony Grantham

Assistant Vice President

Officer

Joseph A. Gambino

Craig E. Schaefer

Douglas B. Kerr

Assistant Vice President

Officer

Patricia M. Goessling

Abby L. Schafers

Kevin L. Kliesen

Assistant Vice President

Officer

Stephen P. Greene

Kathy A. Schildknecht

Michael T. Milchanowski

Assistant Vice President

Officer

Tamara S. Grimm

Philip G. Schlueter

Alexander Monge-Naranjo

Assistant Vice President

Officer

Lena Harness

Amy B. Simpkins

Juan M. Sánchez

Assistant Vice President

Officer

Karen L. Harper

Scott B. Smith

Guillaume A. Vandenbroucke

Assistant Vice President

Officer

Jennifer A. Haynes

Yvonne S. Sparks

Jeffrey M. Zove

Assistant Vice President

Officer

Kevin L. Henry

Kristina L. Stierholz

Assistant Vice President

Cathryn L. Hohl

Rebecca M. Stoltz

Assistant Vice President

stlouisfed.org | 67

A L S O F R O M T H E S T. L O U I S F E D

Have you met FRED?

Into history? Explore our digital library.
D I S C O V E R E C O N O M I C H I S T O R Y | S T. L O U I S F E D

FRED® (Federal Reserve Economic Data) is the signature

Interested in reading original press releases from the 2007-

economic database of the St. Louis Fed. It houses more

09 financial crisis? FRASER® (Federal Reserve Archival Sys-

than 500,000 economic and socioeconomic data series from

tem for Economic Research) is the largest digital collection

regional, national and international sources. Find FRED at

of Fed historical materials, covering U.S. economic history

fred.stlouisfed.org. The FRED app is also available for down-

from the American Revolution through today. Check out the

load for iPhone and Android devices.

library at fraser.stlouisfed.org.

Celebrating 100 years of Review.

Into blogging? So are we.
Our On the Economy
blog features commentary and analysis
from St. Louis Fed
economists and other
experts. For everyday

The St. Louis Fed’s most academic publication, Review

economics, check out

offers research and surveys on monetary policy, banking,

Open Vault. Into research? The FRED Blog highlights

national and international issues. Explore topics ranging

interesting data in FRED and lessons on how to get

from cryptocurrencies to battling inflation, from the hous-

more out of the database. Start at stlouisfed.org and

ing crisis to the Fed’s discount window. Read the issues at

select the Blogs tab.

research.stlouisfed.org.

Top of the class? Get there with
Econ Lowdown.

Explore the economy from
the inside out.
The St. Louis Fed’s free Economy
Museum makes economic education and financial literacy more

Our online portal (econlowdown.org) offers free interactive lesson plans, videos, podcasts and more for use in K-12
and college classrooms to teach economics and personal
finance. Create classrooms, assign online courses and monitor students’ progress. Start at stlouisfed.org/education.

accessible to everyone. When you’re
touring downtown St. Louis, come
inside. Interactive games, displays
and videos will help you learn how
the economy works. Plan your visit
at stlouisfed.org/economymuseum.

This is just a sampling of the many resources available to the public free of charge. To see more, go to stlouisfed.org.
FRED, FRASER, GeoFRED and FREDcast are registered trademarks of the Federal Reserve Bank of St. Louis.
Center for Household Financial Stability is a trademark of the Bank.

C O N TA C T U S

CREDITS

Federal Reserve Bank of St. Louis

Doreen Knapik

One Federal Reserve Bank Plaza
Broadway and Locust Street
St. Louis, MO 63102
314-444-8444

Project Manager and Editor

Little Rock Branch

Project Advisers

Stephens Building
111 Center St., Ste. 1000
Little Rock, AR 72201
501-324-8300

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Louisville Branch
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Karen L. Branding
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Contributing Writers

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Al Stamborski
Contributing Editors

Brian Ebert
Matthew Heller
Audrey Westcott
Art Direction and Design

Michael Kera
Mark E. Kunzelmann
Multimedia Production

Suzanne Shenkman
Research Assistance

Kathie Lauher
Adam Robinson
Photographers

Scott Lamar
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Web Optimization

“I’m focused on where we’re going in the years ahead, where the
economic recovery is rooting, where the debate on monetary policy
will lead us and what the right policy decisions will be in a new era.
… It’s going to be a fascinating journey.”
— James Bullard, President and CEO