Former RBI Chief Raghuram Rajan among 3 Indians Picked For US Federal Reserve Reform Roles

The US Federal Reserve has tapped former Reserve Bank of India (RBI) Governor Raghuram Rajan and two other prominent Indian-origin leaders for advisory roles to reshape American monetary policy.

The appointments were announced Thursday by the newly appointed Fed Chairman, Kevin Warsh, who has established five independent task forces to review the central bank’s operational toolkit and inflation-management strategies. The initiative is already being praised, with Senate Banking Committee Chairman Tim Scott noting that the selections bring fresh, diverse perspectives to the central bank.

Rajan to Study the $9 Trillion Fed Balance Sheet

Raghuram Rajan will join the Balance Sheet Policy team, collaborating with former Fed Governor Jeremy Stein and Harvard economist Karen Dynan. Rajan helmed the RBI from 2013 to 2016 and previously served as the Chief Economist at the International Monetary Fund. His team will be assessing the risks and macroeconomic benefits of the Fed's asset portfolio. The US central bank is currently under pressure to unwind its nearly nine-trillion-dollar balance sheet, which expanded exponentially during the pandemic to stabilize the global economy.

Monetary Policy Review

Two other Indian-origin experts are joining Rajan. Harvard University economist Raj Chetty will co-lead the Data team. Known for his work in utilizing real-time big data to track economic indicators, Chetty’s panel will focus on optimizing how the Fed sees real-world economic shifts.

Microsoft executive and Xbox CEO Asha Sharma has been appointed to the Productivity and Jobs team. Working alongside Silicon Valley investor Marc Andreessen, Sharma will evaluate the implications of emerging technologies, particularly Artificial Intelligence, on labor markets and workforce productivity.

The panels boast other global heavyweights, including former Bank of England Governor Mervyn King and Nobel laureate Thomas Sargent.

Warsh emphasized that the US economy has evolved over the last generation, making it vital to ensure the Fed successfully meets its dual mandate. Operating with independence, these advisory panels will deliver direct strategic feedback to the interest-rate-setting board.

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