2nd Kiel-CEPR Conference on Monetary Policy - Central Bank Independence in the Spotlight

Monetary policy is navigating a perfect storm. Managing an energy-driven inflation shock triggered by the Strait of Hormuz closure, vulnerabilities surfacing in a volatile global economy with slow growth likely to be exposed more frequently to supply-side shocks, and the rise of AI, while operating under uncertainty, unpredictability and political pressure on central bank independence, is what central banks are battling today.

The Strait of Hormuz, one of the world's most crucial energy corridors, has been effectively closed since the outbreak of the US-Israeli conflict with Iran. Oil prices have surged, with analysts projecting further spikes if the closure persists. While a fragile ceasefire is in place, the strait remains contested and the situation unresolved. Monetary policy cannot directly bring down energy prices, but it must identify quickly whether higher energy costs are triggering indirect or second-round effects, to prevent a self-sustaining loop from spilling over into broad-based inflation dynamics.

This shock arrives on an already difficult baseline: tight labor markets, expansionary fiscal policy, and fragile inflation expectations. The global economy is becoming more exposed to such supply-side disruptions, from geopolitical shocks to climate events and trade fragmentation.

Meanwhile, the threat to central bank independence has become an acute institutional challenge — and a particularly dangerous one for price stability right now. Political pressure on central banks, most visibly on the Federal Reserve, has reached levels unseen in decades. Experts warn of a world where monetary policy is bent to serve government debt costs and electoral cycles rather than price stability.

Finally, AI. Its potential to generate productivity gains and expand supply over time is real. But in the short run it is more likely inflationary. Identifying its macroeconomic effects in real time is one of the defining challenges for monetary frameworks this decade.

The challenges interact, amplify each other, and demand responses under uncertainty. Join us to examine what this means for monetary policy, institutional foundations, and the global economy.

Program highlights include:

Policy Panel:

• Philip R. Lane (Member of the Executive Board, ECB)
• Ulrike Malmendier (Professor of Finance and Economics, UC Berkeley)
• Sonja Marten (Chief Economist, DZ BANK)
• Adam Posen (President, Peterson Institute for International Economics)

moderated by Chris Giles (Economics Commentator, Financial Times)

Keynotes:

• “Political Pressure on the Fed” by Thomas Drechsel (University of Maryland)
• “Experience Effects and Central Banking - Inflation Expectations, Anchoring, and Policy Rates” by Ulrike Malmendier (UC Berkeley)

Presenters include Dimitris Georgarakos (ECB, University of Glasgow), Jakob de Haan (De Nederlandsche Bank, University of Groningen), Michael McMahon (Oxford University), Thomas Mertens (Federal Reserve Bank of San Francisco), Raphael Schoenle (Brandeis University), Leslie Sheng Shen (Federal Reserve Bank of Boston, Federal Reserve Board of Governors), Alena Wabitsch (Vienna University of Economics and Business), Michael Weber (Purdue University, West Lafayette), and many more.

While venue capacity is limited, we warmly invite relevant professionals to reach out to us if you are interested in attending the conference. Please contact Friederike McKeague. 

Download full program

We gratefully acknowledge the support of DZ BANK.