Former RBI Governor Raghuram Rajan joins US Fed advisory panel

Ex-RBI Governor Raghuram Rajan, alongside two prominent Indian-origin professionals, will assist the US Federal Reserve in revamping its monetary framework. Newly appointed Fed Chair Kevin Warsh selected Rajan, Harvard economist Raj Chetty, and Microsoft executive Asha Sharma to participate in specialised task forces. These highly anticipated advisory groups aim to completely rethink central banking strategies following years of persistent, stubborn inflation.

Shifts in American central bank policies heavily influence emerging markets like India by altering global capital flows. By incorporating diverse international perspectives, Warsh seeks to modernize operations and adapt to rapidly changing economic conditions. The newly formed task forces must deliver concrete, actionable recommendations within six months. Rajan brings deep financial expertise to the balance sheet policy group. He will evaluate the advantages and risks of current asset management practices alongside colleagues Karen Dynan and Jeremy Stein. Their primary objective is to understand how existing assets affect broader economic decisions. Before leading India's central bank, Rajan gained international recognition for his macroeconomic insights at the International Monetary Fund, making his experience invaluable today.

Data Innovation and Employment Strategies

Chetty will co-direct efforts to upgrade how the institution utilizes economic data. His team plans to enhance the accuracy of real-world signals that dictate interest rate adjustments. Chetty focuses on improving information quality for faster decision-making across various financial sectors.

Sharma brings technological expertise to a group examining productivity and jobs. She will investigate how artificial intelligence and other software advancements impact future employment trends and overall economic growth.

These independent panels will provide evidence-based recommendations directly to the Federal Open Market Committee by late 2026. Warsh emphasizes that this initiative represents a push toward transparency, fresh ideas, and better financial outcomes.

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