This summer, I had the pleasure of interning at the research department of the Federal Reserve Bank of Cleveland (FRBC). FRBC is one of the twelve regional banks that, along with the Board of Governors, make up the Federal Reserve System, our nation’s central bank. As a research intern, I worked directly with economists and research analysts on various projects related to macroeconomics, banking and finance, and regional issues.
My primary assignment within the research department was to assist the newly established Financial Monitoring Team for State and Municipal Finances (Muni FMT). The Muni FMT is one of five FMTs that the Board of Governors created as a result of the Dodd-Frank legislation passed in July of 2010. Working on the Muni FMT allowed me to learn more about conditions of state budgets and public pension systems, and about their relationship to the municipal bond market. I also assisted economists on projects related to home foreclosures and small business lending.
One of my favorite experiences of the summer was attending FRBC’s 2011 Policy Summit, “Housing, Human Capital, and Inequality.” The summit focused on community issues ranging from mortgage lending to education policy. The Federal Reserve System is so important to national (and global) macroeconomic policy that people often forget about the role that each of the twelve regional banks play in community development. The Policy Summit was a great opportunity to learn about the problems that Cleveland faces and the creative solutions being implemented by regional businesses, government, and non-profits.
Upon starting at the Fed, I expected to discover policy debates, but I did not expect to encounter much in terms of politics. The Fed strives to maintain its independence as a central bank, and therefore steers clear of political matters such as fiscal policy. In July of 2010, I had the opportunity to hear Chairman Bernanke testify before the Senate Banking Committee, and was amazed by his ability to remain neutral in his answers regarding legislative policies. While interning at the Fed, the common criticisms leveled at the central bank were part of my daily reading. Critics of the Fed have only become more vocal since the beginning of the financial crisis in 2008. After spending a summer at the Fed, I can understand the criticisms and why they arise. I also believe that many of them are a result of misconceptions of what the Federal Reserve actually does and how it functions.
My internship at the Federal Reserve Bank of Cleveland was the best training in economic policy that I could have asked for, as well as a striking reminder of the need for thoughtful and rational discussion of economic issues. I am so thankful for the Wellman Hill Grant for facilitating my internship experience and look forward to following the experiences of future recipients.