Fed Vice Chair Stanley Fischer cautioned against binding the central bank to rules when it comes to making decisions on monetary policy.
His speech on Friday, however, avoided any direct comment on monetary policy at a time when most of the market expects the central bank to approve a rate hike later this month.
Fischer's comments instead went to a philosophical — and political — question likely to come up in the days ahead regarding the Fed's deliberation process and ultimately why it chooses to act. A movement afoot in Congress seeks to tie the Fed to policymaking that adheres to rules, or to explain itself when choosing to deviate from selected yardsticks.
History has shown that policy is more efficient when committees deliberate rather than stick to specific triggers for policy, Fischer said in a speech at the U.S. Monetary Policy Forum in Chicago.
"Committees and rules each have their advantages. Committees embody a wider range of information and have a capacity for innovation," he said in his prepared remarks.
Rules have their place, he added, but should be employed as part of a discussion, not as the last word, for critical policy decisions.
"Rules can simplify central bank communications, a particularly important feature in forward-looking models of the economy," Fischer said.
"Putting it all together, committees are, on average, likely to make better monetary policy decisions than individuals — an assertion that has received support from academic experiments in which undergraduate students played a part," he added.