At the Minneapolis Fed, we continue to work on how best to use information in asset prices – as encoded in so-called risk-neutral probabilities – to inform monetary policy choices.2 This is a joint effort that involves several parts of the Bank, and we have benefited from interactions with other economists around the System and in academe.
We see it as a critical area for future research. What is perhaps less understood is that people who are not specialists in macroeconomics or finance also play a key role in monetary policy support. For example, the Fed is charged with making monetary policy so as to promote maximum employment.