Matt Levine always makes me laugh.
Yesterday's newsletter had **a Fed entry **(available non-paywalled here: https://newsletterhunt.com/emails/117441), broadly relevant to this MONEY CLASS (#758714)
WHO CONTROLS THE FED?
Yes if the rest of the Fed thinks you’re the Fed chair then that does kind of make you the Fed chair? What if there are two Fed chairs, though? Powell, with the support of the FOMC, saying “the Fed Funds rate is 4.75%,” and a Trump appointee saying “actually it’s 2%”? What would the short-term interest rate be? I feel like the plausible answers are “20%” and “0%.” 1 It has to be something!
...
There is definitely a view in government that padlocking the front door of the Fed and going away would produce better monetary policy than the Fed does. That does not seem to be the dominant view in Trump’s circles, but you can’t quite rule it out.
It would be funnier to name, like, three shadow Fed chairs and have them going around making wildly different pronouncements about monetary policy, and then at the end pick the one who got the most attention. Or have a bunch of different Fed chairs for different points on the interest-rate curve; “when I am Fed chair in two years and nine months, let me tell you what I am going to do to rates.”"
Definitely worth a read
Footnotes
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here's Levine's footnote: "if you read a story that is like “the central bank of Ruritania is mired in a dispute about who its governor is, with the new president’s appointee pushing for lower rates while the previous incumbent insists that he is still in charge,” you would sort of assume that** Ruritania is an inflationary basket case and its short-term market interest rate was like 20%.** But the US is not Ruritania, and if you read any story of the form “weird stuff is happening,” that tends to push US interest rates lower—even when the weird stuff is, like, “the US might default on its debt.” ↩