US Treasury and Council of Economic Advisers

Forbes accepted her first policy position in 2001, when John B. Taylor recruited her to become Deputy Assistant Secretary of Quantitative Policy Analysis for the Latin American and Caribbean Nations at the United States Department of the Treasury.^[1] Her role focused on financial stability in Latin America.^[1] After returning to MIT, Forbes was recruited by Gregory Mankiw to join the Council of Economic Advisers of George W. Bush,^[1] where she became the youngest person in history to hold her position.^[6] As a member of the Council of Economic Advisers, Forbes focused on the economic ascendance of China, where she voiced her belief that workers in other Asian countries would be more impacted by China's rise than those in the United States. She left the CEA in 2005, returning to her academic position.^[1]

Bank of England

In 2014, UK Chancellor of the Exchequer George Osborne appointed Forbes to be an external member of the Monetary Policy Committee of the Bank of England,^[7] replacing Ben Broadbent, who was promoted to Deputy Governor of Monetary Policy.^[8] She became the second woman on the nine-person Monetary Policy Committee, joining Minouche Shafik, formerly of the International Monetary Fund.^[7]

At the Bank of England, Forbes became a vocal dissenter, with commentators labelling her both a monetary policy "dove" and "hawk" at different points in her tenure. In the early months of her position, Forbes advocated against interest rises, arguing that insufficient information was available on whether inflationary pressures in the UK were being masked by the strengthening of the Pound sterling, and the corresponding fall in import prices.^[9] She discussed this tradeoff in her first public speech as a Monetary Policy Committee member, delivered at an event at the Canadian Imperial Bank of Commerce.

In later years, Forbes would become an advocate for interest rate rises, arguing that pessimism about the state of the global economy was overstated.^[10] In November 2014, she emphasized that she placed "slightly more probability on the risk that the global economy could be somewhat stronger than in our baseline forecast", a stance that placed her on the hawkish wing of the nine-member committee.^[10] Despite these views, Forbes would continue to vote against rate rises at most subsequent meetings.^[11] In August 2016, she joined an unanimous majority of the Monetary Policy Committee to lower rates from 0.5% to 0.25% in response to the 2016 Brexit referendum.^[12]

In the months after this vote, Forbes emphasized in public statements that uncertainty created by Brexit was less of a drag on growth than was previously expected,^[13] and advocated against further monetary stimulus and rate cuts.^[14] In June 2017, Forbes joined Ian McCafferty and Michael Saunders to vote in favor of an interest rate increase, bringing the Bank of England closer to a rate increase than any time since 2007.^[15] The 5-3 vote was a surprise to analysts, and led to a sharp increase in the value of the Pound.^[15]

Forbes left the Bank of England in June 2017, returning to her post at MIT.^[16] She was replaced by Silvana Tenreyro, a Professor of Economics at the London School of Economics.^[17] In leaving her role, Forbes criticized the Bank of England and other central banks, arguing that the high public profile of central bankers discouraged aggressive action against inflation.^[18] She also argued that an overload of work for senior economists discouraged deviations from baseline models and analysis.^[18] Mark Carney, then-Governor of the Bank of England, emphasized that Forbes provided "insight, fresh-thinking and academic rigour to our [the Bank of England's] deliberations, as well as a fresh and engaging approach to communications."^[16]