Top economists offer advice to new Fed chief

As Jerome “Jay” Powell ascends to the top spot at the Federal Reserve, he doesn’t lack for advice from prominent economists and former policymakers.

Here’s what some of them have been saying:

■ Alan Blinder, Princeton University professor, former Fed vice chairman: “What I would do if I ran the world would be to make the inflation target a range of 1½ to 2½ percent. That’s still 2. You’re not retreating from 2. You’re not losing your credibility. But what you’re telling people is that the central bank has a limited ability to control anything, including the inflation rate, with precision.”

■ Martin Feldstein, Harvard University professor, former head of the National Bureau of Economic Research: “They should have started a few years ago normalizing policy, raising interest rates. And the price we’re paying for they’re not doing that is that we have a very fragile financial sector with asset prices way out of line with historic norms... (There should be) a shift in focus to include financial stability as a key determinant of what the Fed is trying to do with its monetary policy.”

■ Kristin Forbes, MIT professor, former Bank of England policymaker: “I would actually put a priority on thinking more about macro prudential policy and how it can be used to address financial stability concerns. That gets very complicated — especially in the U.S., where it involves a lot of different agencies. But if there is a way to make that process more ... effective, that would be a priority. I’d start by looking at cross country evidence.”