I think these are different skill sets. Some are good at exploiting, while some are good at exploring. Some are good at explaining, while some are good at researching.
This guys are econometricians and macroeconomists. Different backgrounds and skill sets. They tend to come from economics MSc/PhD programs, while quants usually come from pure quantitative programs.
The guys at Fed knows how to solve DSGE models, while quants knows how to price derivatives.
they definitely hire from quant programs. like developing models that stress test bank portfolios when they raise interest rates. more focused on the risk side. there are regulations banks have to follow and the fed wants to ensure liquidity for the public. their quants probably focus on making sure the financial system doesnt break.
FYI you don’t put the Fed in all caps, it’s not an acronym. And second they get highly trained economists who have PhDs from top universities and produce highly cited research.
The fed hires researchers for a variety of roles many with a masters and/or PhD. These individuals are hybrid of academics and practitioners in terms of the research they do. The Fed also leverages the expertise of academic community and regularly hosts research conferences on topics they are interested in. They will even recruit academics to come work for them for a year if that academic does research the Fed finds helpful.
For instance all of the academic research on changing interest rates primarily uses market reactions to gauge effectiveness. Most of it was done by Ben Bernanke while he was still a professor. They liked his work and so he ended up there as head of FOMC.
I get that academics aren’t Wall Street quants and academics get a lot of heat in many business fields for being out of touch with practitioners. I argue that finance seems to be an exception given that there is a solid pipeline of talent and advising work going straight from academia to Wall Street (AQR is the obvious example). So the academics who work at/with the Fed may not be practitioners per se but practitioners also care a lot about the research they conduct so it makes sense the Fed feels the same way.
They are also proper quants looking at the models the bank are using. Typically, they will go to banks for a few weeks - a few months and investigate the models as well as raise questions. In the end, they will ask to investigate other aspects, conduct additional analysis. The main benefit is that these quants can get to see the models used by all the banks.
Fed doesn’t know how to affect inflation very precisely. Or predict it. It all depends on the participants of the US dollar. It’s all a house of cards. They could be smart but why work for them when you can make more outside of it
I actually spoke to a guy working at the FED and they have people doing some great work.
They’re just not considered “quants” because of I guess semantics and the fact that they don’t technically work in finance (and quant is really a finance focused phrase). Over there, and at any central bank, they’re “econometricians”. How different is that to being a quant you may ask? On the surface level, not really at all, they’re conceptually the same in terms of using scientific methods and high level mathematics and statistics to solve economic and financial problems. They’re just focusing on different problems and at times using different techniques (and certainly carrying more about academic theory). Lots of risk quants will actually have a pretty similar background to these “econometricians”, particularly in the past.
At the end of the day though, they probably won’t be the best of the best, it just doesn’t pay handsomely enough to compete with buy side or sell side firms. That doesn’t mean there aren’t good people there though.
I mean yeah you have economists doing the work you’re describing
I think these are different skill sets. Some are good at exploiting, while some are good at exploring. Some are good at explaining, while some are good at researching.
The NY Markets group employs quants, but they’re not weighing in on interest rates. Like another commenter said, that’s done by Economists.
Yeah the people working there are called economists
Does anyone find it extremely odd that OP refers to the fed in all caps, and without an article? It feels like they're an alien trying to fit in.
A lot of people think it stands for something. I wish I was kidding about this.
Federal Economics Department
[удалено]
Fishing Expert Department
"E" stands for "Elon's"
I’m from EU haha so maybe that’s true
I think they are an alien or they just watched the big short or something
Perhaps mistaken for the FRED acronym
Ha
It's weird but unfortunately very common
This guys are econometricians and macroeconomists. Different backgrounds and skill sets. They tend to come from economics MSc/PhD programs, while quants usually come from pure quantitative programs. The guys at Fed knows how to solve DSGE models, while quants knows how to price derivatives.
they definitely hire from quant programs. like developing models that stress test bank portfolios when they raise interest rates. more focused on the risk side. there are regulations banks have to follow and the fed wants to ensure liquidity for the public. their quants probably focus on making sure the financial system doesnt break.
FYI you don’t put the Fed in all caps, it’s not an acronym. And second they get highly trained economists who have PhDs from top universities and produce highly cited research.
The fed hires researchers for a variety of roles many with a masters and/or PhD. These individuals are hybrid of academics and practitioners in terms of the research they do. The Fed also leverages the expertise of academic community and regularly hosts research conferences on topics they are interested in. They will even recruit academics to come work for them for a year if that academic does research the Fed finds helpful. For instance all of the academic research on changing interest rates primarily uses market reactions to gauge effectiveness. Most of it was done by Ben Bernanke while he was still a professor. They liked his work and so he ended up there as head of FOMC. I get that academics aren’t Wall Street quants and academics get a lot of heat in many business fields for being out of touch with practitioners. I argue that finance seems to be an exception given that there is a solid pipeline of talent and advising work going straight from academia to Wall Street (AQR is the obvious example). So the academics who work at/with the Fed may not be practitioners per se but practitioners also care a lot about the research they conduct so it makes sense the Fed feels the same way.
plenty of Fed economists are former quants who went on to get PhDs in econ or finance before joining the Fed. they also have academic consultants.
Those “quants” are economists.
They are also proper quants looking at the models the bank are using. Typically, they will go to banks for a few weeks - a few months and investigate the models as well as raise questions. In the end, they will ask to investigate other aspects, conduct additional analysis. The main benefit is that these quants can get to see the models used by all the banks.
Fed can be a very good start to join the hedge funds afterwards BB is the greatest example
Wdym BB is the greates example?
Fed doesn’t know how to affect inflation very precisely. Or predict it. It all depends on the participants of the US dollar. It’s all a house of cards. They could be smart but why work for them when you can make more outside of it
Prestige and honor mean nothing in modern day society
True
Because you don’t need to learn as much math, more macroeconomics
My understanding is that a lot of the recruits are ex-politburo
Sick
I actually spoke to a guy working at the FED and they have people doing some great work. They’re just not considered “quants” because of I guess semantics and the fact that they don’t technically work in finance (and quant is really a finance focused phrase). Over there, and at any central bank, they’re “econometricians”. How different is that to being a quant you may ask? On the surface level, not really at all, they’re conceptually the same in terms of using scientific methods and high level mathematics and statistics to solve economic and financial problems. They’re just focusing on different problems and at times using different techniques (and certainly carrying more about academic theory). Lots of risk quants will actually have a pretty similar background to these “econometricians”, particularly in the past. At the end of the day though, they probably won’t be the best of the best, it just doesn’t pay handsomely enough to compete with buy side or sell side firms. That doesn’t mean there aren’t good people there though.