PART I : Setting up the January FOMC meeting
Topic 1: A Monetary History of the United States
Government finance, payment systems, clearinghouses, elastic currency, lender of last resort, aggregate demand management
Reading: A Brief History of Central Banks (Bordo, 2007)
Slide deck: A Monetary History of the United States
Additional readings (optional)
Reading: The First Bank of the United States 1791-1811
Reading: Lessons from a Laissez-Faire Payments System--The Suffolk Banking System 1825-58 (Rolnick, Smith & Weber, 2002)
Topic 2: U.S. Federal Reserve System
Board of Governors vs. Regional Federal Reserve Banks, Independence (legal, operational, political), FOMC
Slide deck: The U.S. Federal Reserve System
Federal Reserve Act 1913
Resource: Teaching About the Fed
Topic 3: Preparing for the January 27-28, 2025 FOMC Meeting
Briefing the Federal Reserve President for the upcoming FOMC meeting
Team preliminary presentations: (i) Financial Market Conditions; (ii) The National Outlook; (iii) International Conditions; (iv) District; (v) Policy
A review of some important U.S. macroeconomic data: slide deck
The theory behind the Fed's monetary policy strategy (Taylor rule): slide deck
Additional reading (optional): Monetary Policy and Asset Price Volatility (Bernanke and Gertler, 2000)
Reading: Statement on Longer Run Goals and Monetary Policy Strategy
Reading: December 10, 2025 FOMC policy statement
Viewing: Jerome Powell press conference, December 10, 2025
Historical material: Transcripts of past FOMC meetings and other historical materials
Summary of Economic Projections (collected in March, June, September, December)
Viewing: University of Miami 2024 Undergraduate Fed Challenge Presentation
Viewing: Briefing the Chicago Fed President
Guest Lecture (Jan 26): Charles Gascon, Federal Reserve Bank of St. Louis
Mock FOMC briefings: (i) Financial, (ii) National, (iii) International, (iv) District, (v) Policy
Wednesday, January 28, 2026. Jerome Powell Press Conference (live)
Post mortem: Real-time observation, Statement dissection, Press Conference Analysis, Immediate Class Discussion
PART II: After the FOMC
Lecture: January 2026 FOMC Post Mortem
What actually changed, and what was pure signal? Statement language: what changed, what did not.
Slide deck: January 2026 FOMC Meeting
Lecture: Theories of the real rate of interest
Slide deck: The Real Rate of Interest (Macroeconomic Principles Course)
Lecture: The Fisher Equation and the Yield Curve
Slide deck: Interest Rates
Key Lessons: interest rates as intertemporal prices; the real interest rate & why it matters; nominal interest rates;
linking nominal & real interest rates through the Fisher equation, the Fisher equation as a no-arbitrage condition;
the yield curve; estimated the forward short term interest via no-arbitrage condition; slope of the yield curve;
how the slope of the yield curve depends on the future real rate and inflation expectations.
Reading: Long Rates Higher Despite Fed Cuts--Why?
Lecture: Banks, Money Creation, and Regulation
Commercial bank balance sheets: deposits, loans, capital; Liquidity vs. solvency; rationale for bank regulation (Basel III, Dodd-Frank);
The Federal Reserve Bank is a bank; monetary policy, balance sheet policy, scarce vs. ample reserves;
Stress episodes and policy responses.
Slide deck: The Money Supply
Slide deck: Stablecoins
Reading: A 10-minute primer on stablecoins
Reading: On Digital Money, Monetary Sovereignty, and Financial Fragmentation
Reading: On the state of CBDC in the United States
Lecture: Money Markets
Treasury markets and repo
Term structure of interest rates
Market expectations vs. central bank policy
Bond vigilantes
Slide deck: Understanding demand for Treasuries and why the yield curve is steepening
Reading: Scott Sumner on never reasoning from a price change
Reading: The Fed's Reserve Management at Crossroads
Reading: No Easy Answers to Questions Facing Kevin Warsh
Lecture: Inflation, Fiscal Policy and Central Bank Independence
Theories of the price-level
Monetary-fiscal policy interactions
Unpleasant Monetarist Arithmetic
Lessons from the 2021-22 inflation surge
Reading: The Risk of Higher U.S. Inflation in 2026
Lecture: Central Bank Digital Currency and Stablecoins
Money vs. credit
Stablecoins as narrow banks
CBDC proposals -- solutions in search of a problem?
The GENIUS Act
Slide deck: Stablecoins
Lecture: FOMC Briefing Exercise (setting up for March FOMC meeting)
Student presentations
Assessment and discussion
Lecture: What Have We Learned About Central Banking?
Institutions (rules) vs. discretion
Crisis policy vs. normal times
Technology and the future of money
Limits of central bank powers
OLD OUTLINE
Commercial Banks and Money Markets
(a) Commercial banks, creation and destruction of money.
(b) Commercial bank balance sheets, asset and liability side regulations.
(c) Federal Reserve Open Market Operations.
(d) Scarce Reserves Regime vs Abundant Reserves Regime.
Reading: Lecture notes on the Money Supply
Slide Deck: Money Supply
Teaching tool: Teaching the New Tools of Monetary Policy (St. Louis Fed)
Teaching tool: Expansionary and contractionary monetary policy (St. Louis Fed)
Maturity Structure of Treasuries Held by the Fed (St. Louis Fed)
How the Overnight Reverse Repo Facility Works (NY Fed)
Role of the Treasury (Treasury Department)
Duties and Functions of the Treasury Department (Treasury Department)
Treasury Direct (open your own US Treasury account here!)
Slide Deck: Shadow Banking
Assess/critique: How the Federal Reserve Got So Huge, and Why and How it Can Shrink, Bill Nelson (2024).
Question: Should money markets be subject to "price discovery" the way capital markets are?
Question: Should Central Bank Digital Currency (CBDC) be used to support an interest rate floor?
Financial Innovation: Money Market Funds, Stablecoins.
Monetary and Fiscal Policy Coordination
Slide Deck: Fiscal Theory of the Price Level
(a) Determination of the price-level (fiscal theory of the price-level)
(b) Monetary and fiscal policy coordination vs central bank independence
(c) Interpreting the COVID-19 inflation
(d) Monetary Policy Framework Review
History of U.S. Monetary Policy, 1961-2024
(a) A Monetary and Fiscal History of the United States, 1961-2021, Alan Blinder