Speaker 1: Hello, and welcome to another episode of the Odd Lots Podcast.
Speaker 1: I'm Joe Wisenthal and I'm Tracy Alloway. Tracy, do you
Speaker 1: remember like after the Great Financial Crisis and the FED
Speaker 1: couldn't get the unemployment rate down even with all the
Speaker 1: raid cuts, and people were talking about like monetary policy
Speaker 1: is pushing on a string in this environment. You remember
Speaker 1: hearing that termola? You know what I remember? I remember
Speaker 1: people complaining about below target inflation for many, many, many
Speaker 1: years and how the FED we couldn't figure out why
Speaker 1: the FED wasn't able to push up prices, and now
Speaker 1: fast forward to you know, twenty twenty three, we can't
Speaker 1: figure out why the FED can't bring inflation under control.
Speaker 1: I don't want to insult like the various like brilliant
Speaker 1: economists and pundits out there. I never would, but I
Speaker 1: always found the complaints about like too low inflation to
Speaker 1: just be like hilarious, as if that is, as if
Speaker 1: there was ever like a real problem that anyone in
Speaker 1: the world faced. But I do think it's interesting, like
Speaker 1: you know, this pushing on a string narrative, everyone's sort
Speaker 1: of assumed that, Okay, maybe it's hard for the FED
Speaker 1: to get unemployment down, but that if inflation were to accelerate, well,
Speaker 1: at least we know how to deal with that. Yeah.
Speaker 1: But at the same time, there was this weird sort
Speaker 1: of discrepancy or tension because the FED couldn't figure out
Speaker 1: how to push down employment or push up prices at
Speaker 1: that time, but it seemed to do a reasonably good
Speaker 1: job of like intervening in markets. Yeah, and this was
Speaker 1: this was the chorus that you heard for so many years,
Speaker 1: the FED is coming in and distorting the markets, which
Speaker 1: you know, tacitly admits that they do have an impact there. Yeah.
Speaker 1: I think that's sort of like one thing that everyone
Speaker 1: agrees on, especially in the wake of you know, the
Speaker 1: the massive spasms in March twenty twenty, and then of
Speaker 1: course also in the wake of the Great Financial Crisis.
Speaker 1: The FED is pretty good at stopping financial crisis when
Speaker 1: there's a run on some sort of bank if it
Speaker 1: so chooses that. Like, maybe the FED can't get inflation
Speaker 1: at target when it plans, maybe it can't get employment
Speaker 1: at maximum employment, but it can definitely stop bank runs. Well,
Speaker 1: the other thing I would say, and we should stop
Speaker 1: talking soon because our guests, Yeah, we could keep going forever.
Speaker 1: But I think people forget how much things have changed
Speaker 1: in the span of let's see, like fourteen or fifteen years,
Speaker 1: because I remember, you know, I remember writing about the
Speaker 1: corporate bond market and it was like, ooh, maybe one
Speaker 1: day the FED will have to come in and bail
Speaker 1: out the corporate bomb market, and that was the worst
Speaker 1: thing that could happen. That was like, I got so
Speaker 1: much pushback on that, and then lo and behold, twenty
Speaker 1: twenty two happens, and the FED comes in and rescues
Speaker 1: not only the corporate bomb market, but treasuries, munies, pretty
Speaker 1: much everything, and it's sort of an accepted state of
Speaker 1: as now right. And of course this is one of
Speaker 1: the things we talked about in a recent episode, our
Speaker 1: live episode with a love Menend and Josh Younger. Anyway,
Speaker 1: let's get right to it. Let's talk more about how
Speaker 1: the FED has taken on these new powers, these new responsibilities,
Speaker 1: what it can do, what it can't do. We're going
Speaker 1: to be speaking with Gina Smilet, fed reporter at the
Speaker 1: New York Times, also a former Bloomberger, a former colleague
Speaker 1: of US, and the author of the new book Limitless.
Speaker 1: The Federal Reserve takes on a new age of crisis,
Speaker 1: which I see is number one and the Amazon money
Speaker 1: and monetary policy. Ken, Gina, thank you so much for
Speaker 1: coming on Oblots. Yeah, thank you for having me. Congratulations
Speaker 1: on the new book. You know, I'm curious about the
Speaker 1: title because limitless and obviously we talked about like, okay,
Speaker 1: these new powers that the FED has taken on both
Speaker 1: in the wake of the Great Financial Crisis and also
Speaker 1: the COVID shock, and yet there there does seem to
Speaker 1: be a limit on its actual dual mandate, as in,
Speaker 1: doesn't even have the tools to do like the two
Speaker 1: things max employment and stable prices that we think of
Speaker 1: as being the Fed's core mission. Yeah, so I think
Speaker 1: they're actually fairly interrelated. So the title itself actually comes
Speaker 1: from something Chair Jerome Powell said during sort of the
Speaker 1: depths of the twenty twenty pandemic upheaval. You know, he
Speaker 1: was doing an interview with David Wessel at the Brookings Institution,
Speaker 1: and David asked him, you know, is there a limit
Speaker 1: to how much the FED can do to sort of
Speaker 1: save all of these markets that are crashing. I'm paraphrasing,
Speaker 1: but that visual gist of it, and he said effectively,
Speaker 1: you know, no, there's no limit we can do, you know,
Speaker 1: as much of this as we need to within the
Speaker 1: confines of the law. And so that's that's where the
Speaker 1: title draws from. And I do think that's relatively accurate,
Speaker 1: you know, in the sense that these emergency powers that
Speaker 1: they used to save markets, like Tracy was just alluding to,
Speaker 1: very broad, very comprehensive, can be stretched in a lot
Speaker 1: of ways, and that's a lot of what I talk
Speaker 1: about in the book. But then at the same time,
Speaker 1: you know, when you're busily stretching those in all the
Speaker 1: ways that you're stretching them, it doesn't necessarily of guarantee
Speaker 1: a smooth on ramp back to solid growth and stable
Speaker 1: inflation when we get to the other side of a crisis.
Speaker 1: Maybe just to go back in time a little bit,
Speaker 1: and this is one of the themes that emerged from
Speaker 1: our conversations with Josh Younger and love Men and but
Speaker 1: this idea that the Fed's mandate and its role has
Speaker 1: really changed over time. Can you talk to us about,
Speaker 1: you know, what was the original conception of the FED
Speaker 1: versus what it is today. Yes, So I spend a
Speaker 1: huge amount of time on this in the book because
Speaker 1: I think it's just so interesting, and I think the
Speaker 1: upshot is basically, the FED as it is today is
Speaker 1: not the FED as it was originally envisaged in nineteen
Speaker 1: thirteen when it was set up in basically anyway, nineteen thirteen,
Speaker 1: FED was set up to be a really limited institution
Speaker 1: that was basically going to come in and prevent runs
Speaker 1: on the bank, which were very frequent characteristic of society.
Speaker 1: In that time. We had just had a bunch of
Speaker 1: big financial crises, including a very painful one in nineteen
Speaker 1: oh seven that cost a very bad recession, and so
Speaker 1: that was sort of the idea is we need some
Speaker 1: sort of institution that can both sort of make money
Speaker 1: more organized and make sure that it's not getting stuck
Speaker 1: in Tallahassee when you need it in somewhere in the
Speaker 1: middle of Kentucky. And we need an institution that can
Speaker 1: make sure there's sort of a lender of last resort,
Speaker 1: somebody who can back up markets in times of crisis.
Speaker 1: So those emergency powers always kind of they're very limited
Speaker 1: at the outset. The monetary policy powers really not there
Speaker 1: at the outset, because we were if you recall back,
Speaker 1: you know, we're on the gold standard that sort of
Speaker 1: had some sort of self breaking mechanism. We regularly drop
Speaker 1: the gold standard. So, I mean it was not some
Speaker 1: cure all solution for inflation, but just the way we
Speaker 1: thought about inflation and society very different at the time,
Speaker 1: and the FED didn't have such a developed role in
Speaker 1: sort of regulating the speed of the economy back then.
Speaker 1: FED independence is a term that you hear a lot,
Speaker 1: and I feel like it has different definitions and different contexts.
Speaker 1: But can you talk about, like where did this term
Speaker 1: come from and what did it mean? Like, what is
Speaker 1: this idea? What was the purpose of it? What do
Speaker 1: people mean? And where did it? Yeah? Where did it
Speaker 1: originate from? Yeah? So we need to do a little
Speaker 1: bit more history right here. So you get up through
Speaker 1: the nineteen thirties and the FED has really kind of
Speaker 1: figured out how to actually do some macroeconomic management. They
Speaker 1: sort of figure out that if you buy and sell bonds,
Speaker 1: it can guide interest rates into place you can either
Speaker 1: speed up the economy and slow times or slow it
Speaker 1: down when you need to. And up into the nineteen fifties,
Speaker 1: the FED really starts to take on sort of this
Speaker 1: inflation management job and what we see in the nineteen
Speaker 1: fifties is the Truman administration is really leaning on the
Speaker 1: Federal Reserve to keep interest rates very low, to try
Speaker 1: and sort of buy bonds, use it its ability to
Speaker 1: print money effectively to help sort of fund war efforts,
Speaker 1: fund you know, the fiscal fiscal policies that they want
Speaker 1: to do. And the FED is very concerned about inflation,
Speaker 1: and so we see this real rebellion at the FED
Speaker 1: where they work very hard to wrestle their wrestle control
Speaker 1: over their policies. Back. Mariner Eccles, who's one of the
Speaker 1: sort of important pivotal figures in early FED history, actually
Speaker 1: ends up releasing an account of a very sort of
Speaker 1: thans meeting between the Truman administration and the FOMC to
Speaker 1: the press. It embarrasses the administration. The administration decides to
Speaker 1: come to some sort of agreement with the Fed, and
Speaker 1: we get this nineteen fifty one Fed Treasury Accord, which
Speaker 1: really hands the FED a lot of independence over monetary policy,
Speaker 1: a lot of ability to not necessarily set the targets itself.
Speaker 1: You know, it still has to aim for maximum employment
Speaker 1: and stable inflation, as Congress eventually defines, but it does
Speaker 1: get to decide how it's going to go about those jobs,
Speaker 1: completely independent of the partisan process. So it's funny you're
Speaker 1: talking about this because I wrote about it and we
Speaker 1: talked a lot about it with Josh Younger on that
Speaker 1: episode about the origins of the shadow banking system and
Speaker 1: sort of the modern financial system as well. But just
Speaker 1: to back up slightly, when we talk about central bank
Speaker 1: independence nowadays, we generally talk about it as a good thing,
Speaker 1: and it's often considered a hallmark of a developed economy
Speaker 1: versus say, in an emerging market with perhaps more institutional weakness,
Speaker 1: where the central bank might be pressured to do whatever
Speaker 1: the government wants. Why is it desirable to have an
Speaker 1: independent FED that is perhaps a little bit more free
Speaker 1: from the types of political considerations that you would see
Speaker 1: in electric politicians. Yeah, I think a huge part of
Speaker 1: the reason we treat it as sort of the gospel
Speaker 1: that it is that FED independence should be protected at
Speaker 1: all costs traces back to the nineteen seventies. So in
Speaker 1: the nineteen seventies we had an inflation situation not hugely
Speaker 1: unlike the one today, originally caused by some supply issues,
Speaker 1: some excess demand issues tied to war efforts, and it
Speaker 1: just lasted for years and years, and the FED would
Speaker 1: occasionally raise rates to try and bring it back under control,
Speaker 1: but then when unemployment went up, they would quickly lower
Speaker 1: the rates again, and they just never got a handle
Speaker 1: on it. Historians economic historians think that part of the
Speaker 1: reason for that is Burned then the FED chair was
Speaker 1: really caving to the Nixon administration. Nixon was very nervous
Speaker 1: about reelection. He wanted rates to stay low. Low rates
Speaker 1: translates to low unemployment, and so that was sort of
Speaker 1: the conceit. And it's pretty clear from tapes that were
Speaker 1: released after the fact that Burns, a huge Nixon loyalist,
Speaker 1: did in fact take that into consideration when setting monetary policy.
Speaker 1: And so the idea is, you just don't want to
Speaker 1: have these short term political considerations in place when you're
Speaker 1: doing something as important and potentially painful as fighting inflation,
Speaker 1: because it puts away your decision making in a way
Speaker 1: that allows inflation to become sort of entrenched in the economy.
Speaker 1: And we really saw in that episode that it was
Speaker 1: very difficult to get inflation out once it had been
Speaker 1: so ingrained in economy. There was what people now refer
Speaker 1: to as this inflationary psychology that got just sort of
Speaker 1: really dug in and took a big recession to wipe out.
Speaker 1: Let me sort of like zoom up a bit towards
Speaker 1: the present day, and I'm we're happy to go back
Speaker 1: into the history because I think that's interesting. But one
Speaker 1: dynamic that feels real, and tell me if I'm wrong,
Speaker 1: is that one nice thing about the FED is that
Speaker 1: it can sort of just move, and that there is like,
Speaker 1: I think people have very low expectations for what Congress
Speaker 1: can do on anything these days. It's sort of like
Speaker 1: every once in a while you get a window where
Speaker 1: one party controls the White House and both Houses of Congress,
Speaker 1: and then they have a limited political capital to spend,
Speaker 1: whereas in theory, the FED can just move very fast,
Speaker 1: and we saw that in the middle of March twenty twenty,
Speaker 1: for example. How much of the sort of accumulation of
Speaker 1: powers that the FED has, particularly over the last fifteen
Speaker 1: years during a period of like deep partisan division, is
Speaker 1: simply a function of well, it's one institution in DC
Speaker 1: that is not riven by partisan gridlock. Yeah, So I
Speaker 1: think this is sort of the central conceit of my
Speaker 1: book is we've built up all these powers over a
Speaker 1: time basically because they always made sense in the moment,
Speaker 1: and now we're using them all simultaneously because of the
Speaker 1: situation in Washington, and so I think, you know, everything
Speaker 1: we've talked about so far, so nineteen thirteen we're set
Speaker 1: up to guard against banking crises. Nineteen thirties, we really
Speaker 1: deepen those powers to guard against banking crises because that's
Speaker 1: the problem of the day. Nineteen fifties, the problem of
Speaker 1: the day is increasingly inflation. Nineteen seventies, that is the
Speaker 1: big problem. And so you have sort of these like
Speaker 1: ebbs and flows where everybody's focused, everyone at the fedest
Speaker 1: focused on banking crises, then everyone at the fetist focused
Speaker 1: on inflation. Suddenly we get to the modern era and
Speaker 1: everything is suddenly the FEDE job. You know, we're very
Speaker 1: concerned with sort of the monetary policy management portion here,
Speaker 1: but we're also using them pretty aggressively to fend off
Speaker 1: financial crises and moments of financial crises. And I think
Speaker 1: a lot of the reason for that is because some
Speaker 1: of the things that they can do in moments of
Speaker 1: financial crisis are a lot easier than coming to some
Speaker 1: sort of agreement on Capitol Hill on either a bank
Speaker 1: regulation that might preempt some of those financial problems, or
Speaker 1: be some sort of bailout for the institutions that are
Speaker 1: a problem. So it's a small miracle whenever Congress manages
Speaker 1: to pass a law and yet the Fed can announce
Speaker 1: like a trillion dollar program. It seems almost overnight. Why
Speaker 1: is that. Talk to us a little bit more about
Speaker 1: the process and what limitations, if any, there actually are.
Speaker 1: I guess the clue is in the name of your
Speaker 1: book limitless. But if there are limitations or constraints in
Speaker 1: what the FED can do, Yeah, so there are some limitations,
Speaker 1: but I think that they're actually often exaggerated, even by
Speaker 1: the experts who know a lot about this. So in
Speaker 1: moments of extreme crisis, the FED basically has to get
Speaker 1: a declaration that we are in an unusual and exigent circumstance,
Speaker 1: and it then has to get sign off from the
Speaker 1: Treasury Secretary in order to set up an emergency lending
Speaker 1: facility to help in organization or entity. The facility has
Speaker 1: to be broad based, which lawyers generally mean think means
Speaker 1: about five institutions would have to be able to tap
Speaker 1: it and the FED has to be secured to its satisfaction,
Speaker 1: which means that it can't expect to lose money depending
Speaker 1: on whatever it's defining as its satisfaction. Most lawyers at
Speaker 1: the FED will tell you that this means they can't
Speaker 1: lose money. Lawyers outside the FED will say, that's kind
Speaker 1: of dicey. We're not actually sure that that's true. I
Speaker 1: mean that has always seemed to be really fluid, because
Speaker 1: I remember post two thousand and eight, when the FED
Speaker 1: was doing one of its bond buying programs. Oh, it
Speaker 1: was buying mortgage backed securities mbs, and it said it
Speaker 1: was only buying investment grade mbs. And I remember looking
Speaker 1: up each individual q set for like a week and
Speaker 1: seeing that some of it wasn't investment grade when the
Speaker 1: FED bought it. But it didn't seem that concerned with
Speaker 1: that aspect of the program. Yeah, that's and that was
Speaker 1: actually technically quey. But I think the same basic rules
Speaker 1: supply with these emergency lending facilities. They really are pretty broad, though.
Speaker 1: There's so I think I'm really interesting. The example here
Speaker 1: that comes up a lot is there is this one
Speaker 1: program within the nerdiest name of all time. I think
Speaker 1: because nobody wants to talk about it, but it's the
Speaker 1: term asset loan facility, and basically what it does is
Speaker 1: it buys like it takes honest collateral bundle towns. I
Speaker 1: remember TAP, yeah, yeah, And so we used it twice.
Speaker 1: We used it in two thousand and eight. We used
Speaker 1: it again in twenty twenty. The two thousand and eight
Speaker 1: version was collateralized by the private sector. The FED didn't
Speaker 1: have any government money backing that up. And that's always
Speaker 1: sort of the idea is that, oh, well, there's some
Speaker 1: constraints in here because Congress has to appropriate some money
Speaker 1: to back up these facilities. That's clearly not technically true
Speaker 1: based on the way we've actually done this in the past,
Speaker 1: And so I think there are fewer limits then maybe
Speaker 1: we appreciate. But the one thing that does seem to
Speaker 1: be a real limit is the FED doesn't really have
Speaker 1: a way of just like giving household buying power, which
Speaker 1: of course was a really powerful aspect. It would seem
Speaker 1: of the V shaped recovery we saw it coming out
Speaker 1: of twenty twenty. It was a probable a big aspect
Speaker 1: of the very slow recovery we saw out of two
Speaker 1: thousand and nine, the very modest fiscal stimulas, especially in retrospect,
Speaker 1: not even a trillion from the Obama administration. And it
Speaker 1: feels like a lot of the frustration that people have
Speaker 1: towards the FIT is that it does, on some sense
Speaker 1: seem to be limitless designing these new programs, but actually
Speaker 1: the one thing that might actually move the dial big
Speaker 1: time or meaningfully from a macro perspective, give people money.
Speaker 1: That's still like the one thing they don't really have
Speaker 1: any way of doing right, lending not spending. It is
Speaker 1: sort of the phrase Jo repeats at nauseam. They can lend,
Speaker 1: they cannot spend. You can do lending in ways that
Speaker 1: look a little bit like spending, you know. I think
Speaker 1: we saw some push to do that during the depths
Speaker 1: of twenty twenty, like there were some ideas about making
Speaker 1: loans to municipalities really long termed and really low rate,
Speaker 1: and we didn't actually see them take up that up
Speaker 1: too much. I think they still very much see themselves
Speaker 1: as backstop entities who shouldn't be used in that way
Speaker 1: because it's just too close to fiscal policy. But again,
Speaker 1: I think that's more of a personnel choice that's being
Speaker 1: made versus something that is necessarily legally extremely required, which
Speaker 1: I think is an interesting thing to talk about. And
Speaker 1: I think that, you know, the interesting thing to watch
Speaker 1: is how are these programs used in the future. You know,
Speaker 1: will they continue to see them as this backstop? Do
Speaker 1: they think this fiscal separation is very important? So just
Speaker 1: on that topic, I mean, one of the things that
Speaker 1: you will sometimes hear people in markets talk about is
Speaker 1: this idea of the FED getting bang for its book.
Speaker 1: And I guess it was most salient maybe with the
Speaker 1: corporate bond buying program, where they announced, you know, we
Speaker 1: could spend this much buying up corporate bonds to stabilize
Speaker 1: the market. But in practice, I think I can't even
Speaker 1: remember the exact number. You might know it, but it
Speaker 1: was a fraction of the announced amount that they could do.
Speaker 1: And just by virtue of saying that they were going
Speaker 1: to backstop the market, they brought in credit spreads very,
Speaker 1: very dramatically. Is that always going to be the case
Speaker 1: or is there a possibility that as the FED takes
Speaker 1: on more and more responsibilities and if it maybe has
Speaker 1: to use these things over and over again, that sort
Speaker 1: of firepowers starts to dissipate. I think This is such
Speaker 1: an interesting question, and I do not pretend to be
Speaker 1: enough of an expert at market it's to have a
Speaker 1: great answer to it. But I've talked to a lot
Speaker 1: of people about this, and I think you actually get
Speaker 1: a range of opinions. There are some people who say,
Speaker 1: you know, they're such a credible lender of last resort
Speaker 1: that this is basically going to stay this way, that
Speaker 1: you know, we people it'll work forever. Yeah, people believe them.
Speaker 1: I think other people will sometimes point you towards some
Speaker 1: of the treasury market dysfunction that we saw really early
Speaker 1: in the crisis, where it didn't seem like people were
Speaker 1: being completely reassured. And I actually think that's an interesting
Speaker 1: distinction because I think that speaks to sort of market fragmentation,
Speaker 1: you know, it just to sort of rewind the tape here,
Speaker 1: back in twenty twenty, people were dumping treasuries. It wasn't
Speaker 1: like one or two entities, and they weren't necessarily all
Speaker 1: US based dumping treasuries. It was everybody. It was hedge
Speaker 1: funds who had basis trades on, it was a lot
Speaker 1: of international holders. A lot of the selling was coming
Speaker 1: out of like the Cayman islands, and so I think
Speaker 1: there was this real sort of signal problem where the
Speaker 1: FED might be stepping up. You might be pretty familiar
Speaker 1: with what the Fed's doing, but there was this idea like,
Speaker 1: you know, how aggressively are they going to do this?
Speaker 1: Can we trust them? You know, there's so many entities
Speaker 1: having trouble coordinating at the same time. And so I
Speaker 1: do think those market structure issues kind of do matter,
Speaker 1: because FED efficacy could be different if market structure changes
Speaker 1: and becomes more fragmented. I want to get back actually
Speaker 1: to the munique backstop that we saw in twenty twenty,
Speaker 1: which was like a pretty novel, you know, further extending
Speaker 1: of the power, kind of a novel policy intervention. And
Speaker 1: one of these areas that did seem to like is
Speaker 1: this fiscal policy is a monetary policy. It's kind of
Speaker 1: fiscal if you're allowing fiscal authorities to spend money, you know,
Speaker 1: for obvious ways. But the question I have is like,
Speaker 1: when they're thinking about, well, where is the boundary, where's
Speaker 1: the border between what monetary versus lending? Do they like?
Speaker 1: And I've asked this question to others and I'm still
Speaker 1: trying to wrap my head around it. Do they think
Speaker 1: about where they want to go and then backfill the
Speaker 1: legal justification, or do they look at the law and
Speaker 1: then determine how far the law allows them to go? Yeah,
Speaker 1: so I think we've seen that very somewhat by crisis.
Speaker 1: I think in two thousand and eight, I would say
Speaker 1: it was definitely the latter, And I actually think that's
Speaker 1: pretty well documented at this point. Like I think if
Speaker 1: you read like the more recent Burnet keybook for example,
Speaker 1: I think that pretty clearly they took very seriously, very
Speaker 1: seriously this idea that there were things they might have
Speaker 1: wanted to do that well, they knew, they knew what
Speaker 1: had to happen, right, Like I think they like they
Speaker 1: knew it had to happen, and they were really trying
Speaker 1: to figure out how they could accomplish that within the
Speaker 1: confines of their own legal mandate. Got it. I think
Speaker 1: that in twenty twenty is some combination of they knew
Speaker 1: what they were capable of based on the two thousand
Speaker 1: and eight experience, and they were kind of looking for
Speaker 1: places that you might need to build on that given
Speaker 1: the sort of unique circumstance that was twenty twenty. The
Speaker 1: municipal program, though that you mentioned. I think was a
Speaker 1: particularly interesting example because they had literally said for basically
Speaker 1: years at that point that they were not going to
Speaker 1: do municipal bonds. That like, so similar to what you
Speaker 1: said about the corporate bonds, Tracy. They had been very
Speaker 1: clear that this was not a market. It was like
Speaker 1: tossing a rubicon that they didn't want to do, and
Speaker 1: I think they explicitly said that at some point. Yeah,
Speaker 1: Rashida to Leive asked them about it. Freshman Democrat asked
Speaker 1: Pal about it on Hill in twenty nineteen, and he
Speaker 1: was basically like, we don't have this power, nor do
Speaker 1: we want this power. And then kind of, you know,
Speaker 1: very interestingly April ninth, twenty twenty, and they they jumped
Speaker 1: right into that market. You know, the municipal bond market
Speaker 1: was in shambles when they jumped in. It was really bad.
Speaker 1: People were really struggling to issue States and localities like
Speaker 1: Care's Act has just passed, We're not sure if it's
Speaker 1: enough money. States and localities really need money because the
Speaker 1: pandemics on set, you know, there, it was a tough moment,
Speaker 1: and so I think that it's not a surprise that
Speaker 1: they saw the need. But it was interesting that they
Speaker 1: thought they could fulfill it. Well, it definitely reminded me
Speaker 1: at the time of the ECB's OMT program, or the
Speaker 1: ECB said for years, we can't lend to member states,
Speaker 1: we can't lend a member state, and then when things
Speaker 1: are really falling apart, they're like, well we can, and
Speaker 1: the reason we can is because of member states don't
Speaker 1: have a borrowing capacity. Then we can't really fulfill our
Speaker 1: monetary mission. So it's sort of like backfill in a
Speaker 1: new power based on the law, just because they kind
Speaker 1: of realized that the existing thing was untenable when the
Speaker 1: facts changed, change my mind, or whatever that quote was.
Speaker 1: But you know, a lot of what we're talking about
Speaker 1: is the sort of mixing or maybe overlap between monetary
Speaker 1: policy and fiscal and so I want to ask a
Speaker 1: devil's advocate question, and I want to make very clear
Speaker 1: that this is a devil's advocate question, But you know,
Speaker 1: why couldn't we have a situation where if Congress is
Speaker 1: gridlocked and politicians can't do anything, for instance, with the
Speaker 1: debt ceiling, why couldn't we have the FED say that
Speaker 1: it is going to support a particular thing or mandate
Speaker 1: like maybe they want to finance a bunch of renewable energy,
Speaker 1: or maybe they want to finance a lot of infrastructure
Speaker 1: or something like that. Why would that be bad? Yeah,
Speaker 1: so I think that there are some people who think
Speaker 1: that that would actually be great and we should do it.
Speaker 1: And you know, we have this amazing tool at our
Speaker 1: capit at our disposal, and why shouldn't we use it? Basically,
Speaker 1: and that is that is one argument. I think there's
Speaker 1: another side of this story that basically says you wouldn't
Speaker 1: want to do that because if the FED is seen
Speaker 1: as a really part as an actor, if they're doing
Speaker 1: things that one side of the aisle really feels strongly
Speaker 1: shouldn't be happening, you could see a situation where a
Speaker 1: they face a lot of backlash on the hill that
Speaker 1: eventually results in them losing this priced independence that we've
Speaker 1: just talked about, or you could see a situation where
Speaker 1: they're just sort of less trusted as an entity. And
Speaker 1: these are a bunch of unelected officials, right like they're
Speaker 1: sort of mandate. Whatever legitimacy they have in our democratic
Speaker 1: system kind of ties back to this idea that they're
Speaker 1: honest brokers. Nonpartis and trying to be center at the aisle.
Speaker 1: Joe's face when I was asking that question, By the way,
Speaker 1: I could tell that you were waiting for me to
Speaker 1: ask about the trillion dollar coin. Yeah, because you said
Speaker 1: dead ceiling, and so I was like, I got real excited. Wait, wait, wait, wait,
Speaker 1: I would just say Gina's response there. This is the
Speaker 1: reason why I think the trillion dollar coin is actually problematic,
Speaker 1: because it's one thing to say, like, well, I agree
Speaker 1: with them doing it this time, but what about the
Speaker 1: next actor that comes in? You know, you might not
Speaker 1: necessarily agree with it. Then yeah, meant another one, but
Speaker 1: all right, we're gonna actually we're gonna put a parenthetical
Speaker 1: at this part of the conversation. At any point in
Speaker 1: the researching of your book, did you glean any insight
Speaker 1: into whether the FED would accept a trillion dollar platinum coin.
Speaker 1: Did this come up at all in your research? No,
Speaker 1: it did not. It did not, And I will say
Speaker 1: I've spent a lot of time recently rereading all of
Speaker 1: the old transcripts around that limit. I don't think I
Speaker 1: don't think there's going to be a lot of appetite
Speaker 1: over there, I'm sorry to tell you. And when the
Speaker 1: alternative is blowing up the economy as we know, Sue
Speaker 1: suddenly appetites change. But I do want to get back
Speaker 1: to actually, I mean, I thought Tracy's Devil's advocate question
Speaker 1: wasn't really was pretty legitimate. And you know, there is
Speaker 1: this sort of an argument you sometimes hear from certain
Speaker 1: types in DC and never totally bought into the logic.
Speaker 1: But I'm curious your take on it, which is that
Speaker 1: when the FED does things like these extraordinary emergency measures
Speaker 1: in March twenty twenty or in two thousand and nine
Speaker 1: or whatever, that it's kind of bailing out politicians, and
Speaker 1: that the FED should say no, like, if you want
Speaker 1: to have sound cities and states that don't have to
Speaker 1: lay off all your workers, get together and pass a
Speaker 1: law to bail out cities and states or whatever it is.
Speaker 1: Or even you heard this in you know something just
Speaker 1: with rate policy in them in twenty tens, where they're like, no,
Speaker 1: Congress should be using fiscal tools, and if we keep
Speaker 1: cutting rates, that's mostly good for the stock market and
Speaker 1: the ridge, and it's not really great, and the FED
Speaker 1: should say we're not going to just cut rates because
Speaker 1: the Congress won't do his job and pass more pro
Speaker 1: growth policies in your view, like, does that reverse feedback
Speaker 1: mechanism theoretically exists where if a theoretical FED chair wanted
Speaker 1: to say, we are not going to do X because
Speaker 1: we want to force elected officials to do what elected
Speaker 1: officials should do, could it play a role in preventing
Speaker 1: politicians from just sort of passing on these problems to
Speaker 1: this third party. Yeah, you know, I think it's a
Speaker 1: really interesting question. I don't actually think that it has
Speaker 1: a simple answer. Partially because you just talked about a
Speaker 1: lot of different policies and sure should probably have different applications,
Speaker 1: but also just because you know, I think that these
Speaker 1: I think that these issues are probably pretty case by case,
Speaker 1: Like we're working with different congresses, we're working with different
Speaker 1: policy tools, and I do think that that just makes
Speaker 1: things very messy. And I think actually one thing I
Speaker 1: try to communicate in my book, which I think you
Speaker 1: can do pretty nicely in a book in a way
Speaker 1: that you can't necessarily do in a news story or
Speaker 1: anywhere you have to be brief, is a lot of
Speaker 1: these choices are just really different. Like sometimes there are
Speaker 1: no good alternatives if you're the FED, Like what you're
Speaker 1: doing is going to enable some bad behavior by either
Speaker 1: a politician or a market actor. But if you don't
Speaker 1: do it, you risk some pretty serious problems. And I
Speaker 1: think there's no clear rubric sometimes, and I think that's
Speaker 1: really interesting, and I actually think that's a good reason
Speaker 1: to talk about these kinds of responses after they happen
Speaker 1: and sort of plan for them in the future instead
Speaker 1: of waiting and making all of these decisions in a crisis.
Speaker 1: You know, I think it's I think to the extent
Speaker 1: that you can pre plan for this stuff, it could
Speaker 1: make it make those decisions a little bit less at
Speaker 1: hawk when they're happening. Yeah, And it definitely feels like
Speaker 1: it's true that having had the experience of two thousand
Speaker 1: and eight, the FED was better prepared or at least
Speaker 1: more willing to sort of roll out that emergency playbook
Speaker 1: in twenty twenty, which was probably very helpful. Just going
Speaker 1: back to the idea of FED independence versus sort of
Speaker 1: like efficiency and expediency. What should guardrails on the Central
Speaker 1: Bank's power? Actually willk like? Yeah, So I distinctly did
Speaker 1: not take a position on this in this book, because
Speaker 1: you know, I don't think it's my job necessarily as
Speaker 1: a journalist. But I will say I think, you know,
Speaker 1: you hear proposals from a range of experts to study
Speaker 1: this and do have opinions on it that I think
Speaker 1: are interesting to at least talk about. You know, there
Speaker 1: are some people who think that there shouldn't be guardrails
Speaker 1: and that you should actually make more ambitious use of this,
Speaker 1: that you should think more about how to use these
Speaker 1: policies expansively. There are some people who think that you
Speaker 1: should apply more of a sort of formulaic approach to these,
Speaker 1: like there should be some sort of trigger for when
Speaker 1: you use market functioning QWE, for example, is one thing
Speaker 1: I've heard as a proposal. And then there are some
Speaker 1: people who think that there should just be more explicit coordination,
Speaker 1: like something should trigger a moment of coordination between the
Speaker 1: Fiscal Authority and the FED in an even more coordinated
Speaker 1: way than just having a Treasury sign off. You know,
Speaker 1: for example, if the FED is doing market functioning QWE,
Speaker 1: the Treasury should immediately be involved in that. And so
Speaker 1: I think those are some of the things that you'll
Speaker 1: hear people say. I think that, like I said, I
Speaker 1: think this all just deserves a little bit more debate
Speaker 1: than maybe it's gotten in the wake of twenty twenty,
Speaker 1: because these tools are so powerful that it seems likely
Speaker 1: they're going to be used again. Well, you know, we're
Speaker 1: recording this actually on a March seventh, and you know,
Speaker 1: there was just a pull hearing on the Hill and
Speaker 1: some of these questions. It was in front of the Senate,
Speaker 1: and some of these questions came up from both sides,
Speaker 1: but about like climate and the FED and how the
Speaker 1: FED thinks about climate risk. And you have conservatives more
Speaker 1: saying like why should the FED be anywhere in the
Speaker 1: business of anything to do with climate, And then you
Speaker 1: have others it's like, well, climate is a risk to
Speaker 1: the economy, and there are various reasons why climate could
Speaker 1: take part. But again I'm curiously sort of this broader
Speaker 1: question of how much does the FED sort of even
Speaker 1: on these very long sort of like non acute things
Speaker 1: come essentially this like sinc where they into all these
Speaker 1: fights end the becoming FED related because it's really hard
Speaker 1: to pass anything climate related, or it's really hard to
Speaker 1: pass anything related to sort of like a racial justice
Speaker 1: right now, So all of these things become FED issues
Speaker 1: because we have so little hope that Congress can do
Speaker 1: anything about them. Yeah, and I think that they certainly
Speaker 1: have to some degree become FED issues. We certainly talk
Speaker 1: about sort of racial wealth quality, and we certainly talk
Speaker 1: about sort of the climate risks and climate finance in
Speaker 1: the context of the FED. I think the interesting thing,
Speaker 1: I think you kind of alluded it to it earlier,
Speaker 1: is that the FED can't always do so much in
Speaker 1: these domains, and so sometimes I think there is this
Speaker 1: risk that you have a false sense of security where
Speaker 1: you feel like, hey, the FED is kind of on this,
Speaker 1: and actually the tools are just poorly equipped to handle this.
Speaker 1: You know. It's interesting because for all of the expanded
Speaker 1: powers in the new error areas that they've gotten into it,
Speaker 1: each crisis, there does seem to be a pretty deep conservatism,
Speaker 1: and I don't mean it in the right right left
Speaker 1: sense of just a sort of institutional conservatism about just
Speaker 1: going back to like the dual mandate, like two percent
Speaker 1: inflation seems pretty sack or sanct They post twenty ten
Speaker 1: like in this sort of six and a half unemployment.
Speaker 1: Is that full employment? Like six and a half percent
Speaker 1: unemployments pretty high. But you know, some early inclinations that
Speaker 1: maybe that would be enough. Why is that aspect of
Speaker 1: the FED. You know, Janet yell And who I think
Speaker 1: many would consider it to be a sort of devish
Speaker 1: policy maker, never seemed to be particularly comfortable with the
Speaker 1: idea of like letting it run hot at that time.
Speaker 1: Why is that aspect one area in which you don't
Speaker 1: see a particularly like a lot of like a creativity
Speaker 1: about Yeah, So on the inflation side of things, I
Speaker 1: think that we probably were headed in the direction of
Speaker 1: a little bit more creative VI before this episode. Actually,
Speaker 1: you know, they didn't sort of change their inflation target
Speaker 1: in the sense that they made it. They gave it
Speaker 1: a look back period, they made it an average over time.
Speaker 1: I think we're getting like pretty close to that with
Speaker 1: just like actually nudging it up a bit, But we
Speaker 1: didn't get there. They certainly didn't do that. But I
Speaker 1: do think that there was sort of like, you know,
Speaker 1: not a thousand flowers were blooming, but a few more
Speaker 1: flowers were blooming when it came to the inflation target.
Speaker 1: On the employment side of things, I would say that
Speaker 1: they are conservative in the sense that they still think
Speaker 1: about the world through a sort of very Phillip's curve framework.
Speaker 1: Meaning that there's some trade off between employment and inflation.
Speaker 1: But I think that they've become a lot more modest
Speaker 1: about their ability to understand that Philip's curve. And it's
Speaker 1: difficult to say they hear because we're talking about like
Speaker 1: nineteen policymakers, and this applies to each of them a
Speaker 1: little bit differently. Some of them are still pretty devoted
Speaker 1: adherence to the idea that they can specify some sort
Speaker 1: of natural rate of unemployment. But I think a lot
Speaker 1: of them, and including the chair importantly right now, has
Speaker 1: have become a lot more skeptical about the idea that
Speaker 1: you can credibly predict how low unemployment can go without
Speaker 1: causing inflation at any given moment, And so I do
Speaker 1: think some of that conservativism has actually waned with time.
Speaker 1: This episode obviously throws a big rention for that, right.
Speaker 1: I mean, you do get the sense from policymakers now
Speaker 1: they are more open about saying like, well, maybe there
Speaker 1: is something particularly about inflation that we are missing here,
Speaker 1: and I think we've had one or two people on
Speaker 1: the show who've talked openly about that. But this actually
Speaker 1: leads into something else I want to ask you, which
Speaker 1: is with that realization that perhaps there's something about the
Speaker 1: Phillips curve that's changed or that we don't fully understand
Speaker 1: as policymakers. And also with the evolution of the fed's
Speaker 1: role in the financial system and markets. How do FED
Speaker 1: officials themselves feel about this? Presumably you talk to current
Speaker 1: and former ones. How do they explain it and how
Speaker 1: do they talk about it? Yes, so I think a
Speaker 1: lot of times when you talk to FED officials about this,
Speaker 1: you will hear some amount of concern actually that if
Speaker 1: you ask the FED to do too much, it won't
Speaker 1: be able to do anything well. So I do think
Speaker 1: that that is a thing that they're very attuned too,
Speaker 1: and that's I mean, it's not a huge surprise. I
Speaker 1: think they kind of gave us some hints of that
Speaker 1: and sort of that twenty fifteen hiking cycle that you
Speaker 1: were previously talking about when Congress just wasn't passing anything
Speaker 1: to help the economy along, and you know, you would
Speaker 1: hear FED officials occasionally say that out loud. But I
Speaker 1: think after twenty twenty, I think there was still some
Speaker 1: feeling that you just don't want to push too much
Speaker 1: on the FED. Not everything should be the Fed's job.
Speaker 1: I do think when it comes to sort of the
Speaker 1: framework and the how do you think about the economy
Speaker 1: in this brand new world, I think the you know,
Speaker 1: the jury is just not out yet. They're they're still
Speaker 1: trying to figure out what went wrong in twenty twenty
Speaker 1: and twenty twenty one, and they're still trying to figure
Speaker 1: out what's what's going wrong now because they don't seem
Speaker 1: to be getting this inflation under control as quickly as
Speaker 1: they had expected to. I think so, I think it's
Speaker 1: just a situation in flux. How much of the rapid
Speaker 1: movement and it was like basically day after day in
Speaker 1: early twenty twenty, their ability to roll out these new programs.
Speaker 1: How much easier was that because of scaffolding basically that
Speaker 1: was built in two thousand and eight and two thousand
Speaker 1: and nine, And how much specifically the work of like
Speaker 1: Brunankee work with Geitner, et cetera, enabled Powell and Manuchin
Speaker 1: together to move as fast as they did. So I
Speaker 1: think that there I'm actually gonna give a two part
Speaker 1: answer to Okay, Part one is definitely the scaffold. Scaffolding
Speaker 1: mattered a lot a They kind of had a pattern
Speaker 1: for how this could work, and B they had some
Speaker 1: ability to not make the mistakes that happened in two
Speaker 1: thousand and eight, Like, for example, they kept better track
Speaker 1: of these programs and were very transparent about them. They
Speaker 1: told us what they were buying, not at a five
Speaker 1: year leg but just immediately. And B they got congressional
Speaker 1: backstop for every single one of the programs that mattered.
Speaker 1: Like it wasn't like what I described earlier in two
Speaker 1: thousand and eight when they used private sector money to
Speaker 1: set up the TAF And I think the reason they
Speaker 1: did that is because they thought that there was some
Speaker 1: sort of democratic legitimacy to having that sort of you know, buy,
Speaker 1: and also it's easier. It was like an easier setup.
Speaker 1: But I do think the democratical legitimacy part mattered there,
Speaker 1: and so I think we learned a lot of lessons
Speaker 1: from two thousand and eight. Part B, though, I would say,
Speaker 1: is while they learned a lot of lessons in the
Speaker 1: scaffolding mattered, they had to set up a bunch of
Speaker 1: new programs that they had never seen, never tried before,
Speaker 1: municipal main street lending, etc. Etc. And I also think
Speaker 1: that they had really not been anticipating that they were
Speaker 1: ever going to have to use the two thousand and
Speaker 1: eight programs again, for example money market mutual fund program
Speaker 1: that took ton of effort, a lot of late nights,
Speaker 1: a lot of huge scrambling to get set up because
Speaker 1: they just money markets had changed so much in the
Speaker 1: interroom and they hadn't really like been keeping up with it.
Speaker 1: Like there was no design ready to roll off the
Speaker 1: counter for this program, and so it did require a
Speaker 1: lot of last minute sort of legal legal you know, finessing.
Speaker 1: You know, looking forward. Obviously there's always people complaining about
Speaker 1: the FED from everyone. Go that's not new years ago.
Speaker 1: You know, you've had this sort of like abolish the
Speaker 1: FED types, audit the FED types, various attacks on it
Speaker 1: from different angles. But it more or less like seems
Speaker 1: to operate and buy and large. I get impression that
Speaker 1: politicians have other things to worry about that or you know,
Speaker 1: the play better on TV than like, you know, the
Speaker 1: arrangement of monetary policy. Do you perceive any change to
Speaker 1: the trajectory of the FED either your institutional setup. I mean,
Speaker 1: it seems like this sustained period of high inflation maybe
Speaker 1: not great for the FED standing within politics within DC,
Speaker 1: but do you see any like real threats or on
Speaker 1: the horizon to the sort of modus operanda of monetary
Speaker 1: policy in this country. Yeah, so I think actually A,
Speaker 1: I think the sort of little c conservativism that you
Speaker 1: were talking about earlier helps them a little bit in
Speaker 1: this regard. I think when you're like boring, when you
Speaker 1: just bore people to death, it makes them less likely
Speaker 1: that they are going to come and meddle with your
Speaker 1: Federal Reserve Act. So I think that's useful. I do,
Speaker 1: and I talk about this a bit in the book.
Speaker 1: I do think that there are a couple of things
Speaker 1: we should pay attention to here, though. One of them
Speaker 1: is I just think that the elected government has become
Speaker 1: so much more aware of what the FED is capable
Speaker 1: of and what it can do with some of its powers,
Speaker 1: both the emergency lending powers and just bond buying, which
Speaker 1: has become much more passe than it used to be.
Speaker 1: And I think that you have to keep an eye
Speaker 1: on what kind of appointments are being made to the
Speaker 1: Fed's board in Washington. The board is so powerful, The
Speaker 1: board does so much of what the FED does, and
Speaker 1: it's presidentially appointed people, and it turns over relatively quickly.
Speaker 1: They're very long terms, but people don't typically stay in
Speaker 1: them for the long terms, and so you often have
Speaker 1: a situation where it's relatively politically lined up in one direction,
Speaker 1: and it's got all these powers can potentially have a
Speaker 1: partisan lean, And I just think that given how much
Speaker 1: power this institution has, that's something to be very aware of.
Speaker 1: And I think it's something to make sure elected officials
Speaker 1: are focused on appointing nonpartisans to the degree possible and
Speaker 1: feasible in a very partisan world. It is interesting talking
Speaker 1: about like the conservatism. Even the presidents of both parties
Speaker 1: seemed to be conservative in their picks, Like other than
Speaker 1: Trump's failed nomination of Judy Shelton, most of his names
Speaker 1: were like pretty conventional, okay, But I think you just can't.
Speaker 1: I feel like this is a thing that often happens
Speaker 1: in the media and we just pretend like the Judy
Speaker 1: Shelton nomination didn't happen and didn't almost get confirmed right,
Speaker 1: like I think because there was there were some really
Speaker 1: interestings there where they were like just scrapped immediately, like
Speaker 1: Steve Moore was not going to realistically get this job.
Speaker 1: I mean, I think it's highly likely at some point
Speaker 1: the culture wars come to the FED. Yeah, And I
Speaker 1: mean you've seen it with the ESG space and investing
Speaker 1: like it. To me, it's just a matter of time.
Speaker 1: And the way they came for the Supreme Court, you know,
Speaker 1: I think we're in a place with the FED that
Speaker 1: you I think the Supreme Court is the right analogy
Speaker 1: to years. You know, it used to be treated in
Speaker 1: a very different way, not by any sort of legal
Speaker 1: require ronment, just because that's the way we thought about
Speaker 1: the Court. And we're at that stage now where we
Speaker 1: treat the FED a certain way, not because of any
Speaker 1: legal requirement, just because that's how we think about the FED.
Speaker 1: And I think it's just a thing to be aware of.
Speaker 1: You wouldn't want this power to go partisan, because they
Speaker 1: go partisan in both ways. Can I just exactly my point? Yes,
Speaker 1: I totally. Can I just say, we have these monitors
Speaker 1: in the studio of like different TV networks and I
Speaker 1: just saw Larry Cudlow in one of the screens and
Speaker 1: I thought about, like FED Governor Larry Pudlow one day,
Speaker 1: No against Larry, but you know it's like future like
Speaker 1: I don't know, probably not at this point, but it
Speaker 1: is sort of funny to think about. That's like most
Speaker 1: of the names other than Shelton that have ever been nominated,
Speaker 1: you don't associate too strongly with like one party. But
Speaker 1: but you know, the other time, Joe, the other screen
Speaker 1: is to Santis touts culture war priorities in Florida's speech,
Speaker 1: So you know, there you go. It's a it's a
Speaker 1: sign of what's coming, solely a matter of time. Gena Smilok,
Speaker 1: thank you so much. Congrats on the book, and really
Speaker 1: appreciate you coming on, Odlum, thank you having me, Tracy.
Speaker 1: I really enjoyed that conversation. I thought that last point
Speaker 1: in particular, that like what we've seen with the Supreme Court,
Speaker 1: because like obviously, like you know, presidents have always applyned
Speaker 1: more liberal or conservatives, but also like now you don't
Speaker 1: expect to get any votes from the other party for
Speaker 1: your nomination, etc. Like we haven't quite seen that it
Speaker 1: happened with the figuet, but it's almost like, how is
Speaker 1: it going to avoid It seems highly unlikely to me
Speaker 1: that this like very powerful group of technocrats is somehow
Speaker 1: going to be immune to the intense politicization that we've
Speaker 1: seen of literally everything else in the past few years.
Speaker 1: So that's point one. But I also thought Gina made
Speaker 1: a really good point about you know, there is all
Speaker 1: this criticism of the FED, often for just defied reasons,
Speaker 1: and to some extent, it has been accumulating all these
Speaker 1: new powers and abilities that it hasn't been explicitly designated
Speaker 1: to have, at least by voters. But also sometimes it's
Speaker 1: making the tough choices and sometimes there aren't great outcomes. Yep, no,
Speaker 1: and just as ideal, Like I keep thinking of it
Speaker 1: as like it's independent in the sense that, okay, it's
Speaker 1: supposed to be sort of immune from partisan politics and
Speaker 1: make hard decisions and do the tough thing, and that's
Speaker 1: an element. But then there's also these sort of like
Speaker 1: operational independent one entity in DC that does not have
Speaker 1: to like, you know, always go for a vote or
Speaker 1: come to for reelection or whatever. And as it gets
Speaker 1: harder and harder to pass anything in DC, and I
Speaker 1: don't think many people expect that trajectory to change, then
Speaker 1: everyone's like, oh, you guys, you guys don't have to
Speaker 1: worry about the politics that we do. So you're totally right.
Speaker 1: And I think when you use I think you were
Speaker 1: as you use the word sink, right, it's like a
Speaker 1: sink for things that can't get done in Washington, and
Speaker 1: that that is true, and it has been helpful at times.
Speaker 1: But the more it does that, I think, the more
Speaker 1: attention it's going to garner, and the more it becomes
Speaker 1: a target totally, and the more partisan it will become,
Speaker 1: and the more people will be really focused on. Okay,
Speaker 1: but what is your stands on the Fed's role in
Speaker 1: funding climate ceter like? These kinds of things, they'll inevitably
Speaker 1: get more heightened and then you'll have more of those
Speaker 1: fifty one and forty nine nomination votes and things like that. Yeah,
Speaker 1: on that happy note, shall we leave it there? Let's
Speaker 1: leave it there. Okay. This has been another episode of
Speaker 1: the Old Thoughts podcast. I'm Tracy Alloway. You can follow
Speaker 1: me on Twitter at Tracy Alloway and I'm Joe Why
Speaker 1: Isn't Thal? You can follow me on Twitter at the Stalwart.
Speaker 1: Follow Gina on Twitter Gina Smileock. She's at Gina Smilek,
Speaker 1: and check out her new book, Limitless. The Federal Reserve
Speaker 1: takes on a new age of crisis. Follow our producers
Speaker 1: Carmen Rodriguez at rman Armin and Dash Bennett at Dashbot.
Speaker 1: And check out all of our podcasts Bloomberg under the
Speaker 1: handle at podcasts and from or odd Lots content. Go
Speaker 1: to Bloomberg dot com slash odd Lots, where we post transcripts,
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