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Bessent is the most likely next fed chair
There is a lot of logic to combining roles. The "fed" and their member banks are no longer buying Treasuries at the rate they did in the past, therefore they no longer really matter to US Treasury in terms of being a reliable partner for ongoing debt-financing.
Over the last 10 years, all thru Trump-Biden-Trump we've seen a gradual breakdown in US Treasury - Fed relationship.
It makes complete sense for US Treasury to push to take over role of "central bank" - whether this is a good thing or bad thing is largely immaterial....its just how the relationship is structured now. The US Gov needs buyers and if Fed isn't willing they need to be forced into the role.
Yea and for all the pearl clutches its really just a return to how things used to be
The SLR reform goes into effect April 1, conveniently when these bigger refund checks start hitting the wires. https://www.federalreserve.gov/newsevents/pressreleases/bcreg20251125b.htm
That effectively makes it so banks don't have to "buy" treasuries, for all intents and purposes they're cash reserves to banks, which monetizes the debt without a big fed brrrr shocking the market.
What matters in credit is collateral, treasuries are the collateral that matters, but that also forces the government to over-spend... enter Bitcoin as collateral to re-collateralize the banking system.... no more need for fed discretion.
Stablecoins can buy treasuries?
The next chair will be Kevin Warsh or Hassett
Bessent is the most likely next fed chair and markets aren't pricing this at all even though talking heads in-the-know forshadowed it months ago. https://www.cnbc.com/2025/09/19/steve-bannon-floats-idea-of-bessent-running-both-treasury-and-the-fed.html
He's Andrew Mellon 2.0
The Fed-Treasury merger is already well under way, its the most logical next step.