Interest rates should be above the rate of inflation, says Peter Boockvar

Core Viewpoint - The discussion revolves around the Federal Reserve's approach to monetary policy, particularly the balance between addressing inflation and supporting the labor market, with a focus on potential leadership changes within the Fed. Group 1: Federal Reserve's Role and Policy - The Federal Reserve has become an activist institution over the past 25-30 years, and there is a desire for it to return to a more background role similar to the Alan Greenspan era [2][4] - Central bankers face a delicate balance between managing inflation and the jobs market, which can sometimes conflict with policy decisions [3] - Interest rates should ideally be above the rate of inflation to prevent long-term economic issues [4][6] Group 2: Inflation and Economic Conditions - The current economic environment has seen a sharp rise in inflation over the past five years, impacting small and medium-sized businesses significantly [5][13] - A softer labor market is viewed as a symptom of inflation rather than the primary issue, indicating that inflation should be prioritized in policy decisions [5][11] - The absolute level of inflation remains high, and addressing this is crucial for fostering a healthier economy and stronger job growth [13] Group 3: Leadership Changes and Candidates - Kevin Hasset is currently seen as a leading candidate to replace Jay Powell as Fed chairman, with discussions around the structure and independence of the Fed [9][10] - The qualifications of potential candidates, including Hasset, are acknowledged, but there is caution against slashing interest rates without considering the long-term implications [11][14] - The importance of maintaining an independent Fed is emphasized, as market reactions could reflect dissatisfaction with the Fed's direction [10][14]