It is an unforgettable experience in economic analysis, monetary policy decision making, public speaking and teamwork. For participants, it's a 25-minute presentation by a team of three to five high school students representing their school in the Federal Reserve's Second District.
The team's performance consists of two parts: a 12-minute presentation on the economy—modeled after those made by Federal Reserve decisionmakers—and a 13-minute Q&A session. The format of the presentation is flexible; however, each team's presentation must:
- address current economic conditions;
- forecast near-term changes in economic and financial conditions of critical importance to monetary policy (such as unemployment, inflation, and output);
- identify possible economic, financial, and international issues that might present either positive or negative risks to the economy;
- recommend a monetary policy response; and
- write a statement, modeled on the FOMC statement that states the policy decision and communicates the Committee's thinking and reasons.
A Q&A session follows each presentation. Although judges may ask about any relevant topic, they generally ask the following types of questions:
- Questions about the required charts, for example: "Define the unemployment rate and what does it tell us about current resource utilization and output gap in the economy?"
- Follow-up questions related to data, analysis, or recommendations made during the team presentation, such as "Explain your argument that the Fed should not be concerned about possible deflation."
- Macroeconomic and monetary policy questions, for example, "Is there always a trade-off between inflation and unemployment?"
- Hypothetical questions, like "Suppose GDP declined for the next two quarters; how would that change your monetary policy recommendation?"
- Fed-related questions, such as "Should the Fed have a specific inflation target and, if so, should it make that target explicit?"
Schools can enter one team in either of two divisions:
- Competitive division—Teams are scored by a panel of judges, and winners advance to the next round of presentations; or
In either division, Fed Challenge participants develop skills—the ability to think analytically, to make effective presentations, to work as a team—that are valuable for life.
- Instructional division—Rules are the same, but teams do not receive a score and have more time with the judges for coaching and feedback.