The College Fed Challenge
Presented by: Isabella Diaz, Gary Peters, Paul Voigt, Luke Taplin, Anna Ristova, Hiywot Tadesse, Niamh McKevitt
Faculty Advisor: Dr. Meghan Mihal, Professor of Economics and Dr. Rossen Trendafilov, Assistant Professor of Finance
In the fall of 2019, STAC gathered a team of seven students to participate in the nationwide College Fed Challenge competition. The ultimate goal was to create a compelling, yet practical, proposal for U.S. monetary policy that aligned with the Federal Reserve’s dual mandate of stable prices and maximum sustainable employment. To achieve this, we spent much of our time in the Bloomberg Laboratory analyzing key economic trends in domestic production such as labor market conditions, unemployment, the productivity wage gap, and market volatility. In addition, the team also kept potential risks in mind, such as geopolitical factors, overall debt level, capital markets, and global deflationary pressures. At the conclusion of our research, we compiled our findings and monetary policy suggestion into an informative, coherent presentation that was given at the Federal Reserve Bank of New York. Our final recommendation for the Federal Open Market Committee was to maintain the targeted federal funds range between 1-1/2 to 1-3/4 percent. Additionally, we recommend maintaining the IOER at 1.55 percent. Lastly, we recommend continued organic growth of the balance sheet to ensure ample supply of reserves. We were invited back for the semi-finals, and STAC’s team earned an Honorable Mention in District II’s competition.