Students competing in the annual College Fed Challenge issued three recommendations to the Federal Reserve: speed up the bond-buying taper, increase communication, and release a white paper on cryptocurrency.
The former will likely increase the need for raising interest rates sooner than later, while the latter has been promised by Federal Reserve Chairman Jerome Powell, who has been recommended to be confirmed for another term by President Joe Biden.
"The Fed should be more specific about what kind of conditions would trigger liftoff," Pace University team captain Winnie Liu, a member of the winning team, said, Axios reported. "If the economy continues to grow and inflation stays elevated, how long can the Fed afford to wait to raise rates?"
The College Fed Challenge has traditionally placed future economic leaders, including former high school participant Peter Buttigieg, President Joe Biden's transportation secretary, who is currently overseeing a massive supply chain crisis.
"This competition is a window for the Fed to see how young people look at the economy," University of Pennsylvania senior Liza Brover told Axios. "To that extent, people should care what we have to say about inflation and employment."
The advice from the students came before Powell recently admitted inflation is not "transitory."
Pace told the Fed to get specific in its communications before Powell's backtrack in the temporary expectation on inflation, and Pace advised an update from the Fed to Americans.
"It'd be around two pages, just letting market participants into the mind of the Fed and the specific indicators that help guide their outlook — at least while we're in this transitional period with COVID-19," Pace senior and co-captain Fiona Waterman told Axios.
The Powell-led Fed blew it on inflation, according to University of Pennsylvania sophomore and co-captain Brian Lee of the competition's runners-up.
"What we would have hoped to see was the conditions which would have led the Fed to reconsider whether inflation is transitory laid out way ahead of time, maybe in September or August," Lee told Axios.
Next up is an overdue white paper on digital coins.
"Powell did promise to release a white paper about what the Fed thinks about [central bank digital currencies] this summer," University of Pennsylvania senior Isaac Tham told Axios. "It's really cold now and we haven't seen the white paper."
It is expected to be released in the next few weeks, Powell told Congress on Tuesday.
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