2026 Clemens Lecture titled “The Federal Reserve Under Pressure” brought to St. Bens
Lecturer Christina Romer presented on the challenges facing the federal economy using her background in economics and government experience.
On Monday, Oct. 19, students gathered in the Gorecki Family Theater to hear Christina Romer of the University of California, Berkeley, explain the growing difficulties in our economy. At 7 p.m. in the Benedicta Arts Center, the 2026 Clemens Lecture took place, titled “The Federal Reserve Under Pressure.” Romer visited to teach about some of the biggest struggles in monetary decision making. Her career has been expansive, ranging from the classroom to the White House, serving as the Chair of the Council of Economic Advisors in 2009 under the Obama administration.
In her lecture, she highlighted four of the biggest challenges and concerns facing our economy today, focusing especially on how difficult it is to forecast the future. Romer kicked it off by saying, first, monetary policy must be forward- looking. She discussed how hard it is to predict changing trends and how AI will affect the economy.
“Predicting all of these developments, pandemics, financial crises [and the] AI revolution is really hard, and predicting what it’s going to do to the economy is perhaps even harder,” Romer said about this first challenge of economics.
Second, the general public, politicians and even monetary policy makers have unrealistic expectations for what monetary policy can accomplish. Romer even said these expectations seem to be becoming even more common and unrealistic. One thing she noted was that some things the federal reserve can do will affect the economy in the short term, but not in the long term.
She said in her third point that it is hard to deal with sudden supply shocks, and the fact that they are becoming more frequent.
“An increase in prevalence in supply shocks is likely to make the Federal Reserve’s job even harder in coming years,” Romer said.
For the fourth challenge, she mentioned the uneasy relationship between any central bank and any government that wants to borrow money from it. Romer spoke about how national debt can impact us in the future, and the rising concerns about its growth compared to the growth of GDP.
“She really helped me to put everything together and see the bigger picture of what’s going on,” CSB+SJU economics professor Shuoshuo Hou said.
On a brighter note, she continued by describing some things that can help improve our ability to control the economy. One thing to do is to work on improving economic forecasting, because monetary policy decisions must be based on predictions. Romer also mentioned how helpful better data would be for forecasting and making wise monetary decisions.
“Any good forecast has to start with a good sense of where you are now,” Romer said.
She stated it is also important to try and rebuild a consensus around the independence of the federal reserve and realistic expectations. She said this would help rebuild trust in the federal reserve’s judgment and their decision making.
Reducing the prevalence of supply shocks would also be helpful, Romer added, as she reflected on her earlier points of how sudden supply shocks can negatively impact the economy.
“I think there’s just no reason for us to just accept that supply shocks are becoming more common; we should try to do something about it,” Romer said, emphasizing the impact of supply shocks.
Romer’s last tip to make monetary policy making easier was to address our budget deficits and government debt. She discussed the problems that our country’s debt could present in the future, if not addressed properly in the coming years.
The lecture ended with the opportunity to ask any further questions anybody had. Several people volunteered with questions about the impact of AI money- spending on our economy, the way unemployment and inflation rise and fall and how we can do more to educate people about inflation and concerns for the economy.
Romer wrapped up her time with a few words of encouragement.
“Might I leave you with the idea that such efforts are worth making. Monetary policy is a powerful tool… It is our first line of defense… and it has tremendous power to help the economy run smoothly,” Romer said.
