Although a misalignment of term premia with economic fundamentals in the United States is far from evident, the possibility of a sudden, significant tightening of financial conditions is clearly present given the sensitivity of those premia to expectations about inflation, growth and monetary policy.
The governance literature shows that diversity and inclusion improves the pool of committee knowledge, insures against extreme views, and reduces groupthink.9 These principles drive the committee towards an unbiased policy decision—the best that is possible given existing information. Think about this from a practical perspective. Modern monetary policy is confronted by diverse issues such as climate, technological, and other structural and social changes.