


Now, maybe there's a future CEO of Freddie Mac among the students we'll meet next. They've been studying another economic giant: the Federal Reserve.

The teenagers took part in the High School Fed Challenge, and Jacob Goldstein from NPR's Planet Money team couldn't miss that.

JACOB GOLDSTEIN, BYLINE: We're in a gym on a high floor of the New York Federal Reserve in downtown Manhattan.

UNIDENTIFIED WOMAN: Hello, everyone. Good morning. Welcome to the High School Fed Challenge.

GOLDSTEIN: There are about 100 kids here from schools around the region, and they're competing to see who can act the most like a central banker. The reigning champions are from Montclair, New Jersey. At Montclair, it's tough just to make the team.

UNIDENTIFIED MAN #1: There were multiple rounds of tryouts. Our school takes it quite seriously.

GOLDSTEIN: And have you been practicing since February then?


UNIDENTIFIED WOMAN #2: Yeah. We do, like, every day after school for at least two hours.

GOLDSTEIN: The challengers include the team from Ridgefield, Connecticut. These are kids who are so deep into this world that they find themselves using certain words that they've picked up from economics papers.


UNIDENTIFIED WOMAN #4: The word robust. I've seen that in almost every economics article I've ever read.

UNIDENTIFIED WOMAN #3: Anchored. Well-anchored. That's a good one.

GOLDSTEIN: So, here's how it works: 15 teams go before a Federal Reserve economist. The kids have to diagnose the economy and decide if interest rates should stay low or if they should go up, just like the Fed. The goal is to sound like this guy.

BEN BERNANKE: Incoming information suggests that the economy has been expanding moderately. Most community participants expect economic growth to remain moderate over the coming quarters, and then to pick up gradually.

GOLDSTEIN: That's Ben Bernanke, chairman of the Fed. And some of the kids, they do a pretty good impression.

KEVIN O'ROURKE: Due to significant flack in the job market, as well as a lack of wage pressures, inflation expectations have remained well-anchored. Turn to page nine. This trend is reflected in the PCE graph.

GOLDSTEIN: This is Kevin O'Rourke, a member of the Ridgefield High School team. Note the use of well-anchored. These kids aren't just parroting the jargon. It's clear they do have a solid grasp of what the economy means for their lives.

O'ROURKE: Right now, the economy is not in that great of a position, but everyone is - you know, they're holding interest rates back to 2013, 2014. We don't get out of college until 2016, so we're doing OK right now. We're fine going through college with a bad economy, as long as we get out, we have jobs.

GOLDSTEIN: The champs from Montclair, New Jersey, they've also spent a lot of time really thinking about the Fed and its mind-blowing ability to create billions of dollars out of thin air. This is Amadi Shivaka.

AMADI SHIVAKA: One of the really interesting things that we actually talked about was the idea that the Fed just created the money to buy assets and things like that. And that was sort of, like, mind-blowing to me how, you know, the money didn't come from somewhere. The Fed just created a trillion dollars and then put it in the market. And when it feels like it, it can take that trillion dollars and make it disappear.

GOLDSTEIN: Putting the words Federal Reserve Challenge on a college application, it does look impressive, but there's also a sense understanding all this stuff, it really doesn't matter right now. In the finals of the competition, the students answer the kind of questions that the Fed is actually debating. There are five teams in the finals, and they answer questions from the judges. It goes on for hours, so here's the 17-second recap: Montclair, quantitative easing, go.

UNIDENTIFIED WOMAN #5: Large-scale asset purchases or LSAPS.

GOLDSTEIN: Ridgefield, what do we do about the deficit?

UNIDENTIFIED MAN #2: The question is: Is it necessary right now for those cuts to be made?

GOLDSTEIN: Montclair, what about inflation?

UNIDENTIFIED MAN #3: Core inflation is definitely a more accurate tool for judging the long-term increases in price levels.

GOLDSTEIN: There's plenty here for the judges to chew on. Ridgefield is very good, but...

UNIDENTIFIED MAN #4: Our winner is Montclair High School. Congratulations.

GOLDSTEIN: The team from Ridgefield, they got an honorable mention trophy to bring back to their school. They said they're probably not going to put it in the case with the sports trophies. Instead, they'll probably put it in the economics room, where it's more likely to be appreciated. Jacob Goldstein, NPR News, New York.


INSKEEP: Hey, we're glad you're with us on a Friday morning on this local public radio station, and you can continue to follow us throughout the day through social media. You can subscribe to many of us on Facebook, and you can also follow us on Twitter. You can find this program @MORNINGEDITION, @NPRInskeep and @NPRGreene.






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