Federal Reserve & Political Pressure - President Trump is calling for the resignation of Fed Governor Lisa Cook due to alleged mortgage fraud [1][2] - Allegations stem from Cook designating two homes as primary residences to secure better loan terms [1] - A resignation would allow Trump to potentially appoint a fourth member to the seven-member Fed board [2] - Trump has pressured Fed Chair Jerome Powell to lower rates, criticizing the Fed's headquarters renovation [3] - Central bankers are rallying in support of the Fed's independence amidst political pressure [3][4] Potential Impact - The upcoming symposium in Jackson Hole aims to reaffirm institutional autonomy [4] - Increased political pressure on the Fed could impact monetary policy decisions [3][4]

Gold held a gain after President Trump’s call for Federal Reserve governor Lisa Cook to quit raised fresh concerns about the central bank’s independence https://t.co/IpVAolQcOT ...

Central Bank Independence - Central bank independence is critical to the well-functioning of the US economy [2] - The speaker has researched the value of central bank independence for 20 years and data shows lack of independence is not a good thing [3] - Maintaining central bank independence allows for non-political decision-making [3][5] Criticism and the Role of the Chair - Criticism from markets, Fed watchers, and average consumers is part of the job of the chair [4] - The next chair will need to continue the tradition of central bank independence [5] - The president is free to express opinions, but the focus should remain on data and the job itself [1][2]

Central Bank Independence & Market Stability - Central bank independence is crucial for global investor confidence [2] - Political interference with the central bank injects chaos into the financial system [2][3] - Political meddling increases market unpredictability and volatility [3] - Protecting the Fed's independence safeguards capital flow and inflation expectations [4] Potential Risks of Political Influence - Threats to the Fed's chair signal a desire for control, not just policy change [2] - The market's faith in long-term stability crumbles if the Fed becomes a political tool [2] - Interest rates risk becoming campaign tools, and inflation targets could be manipulated [2] - Investors must factor in a new kind of risk when political influence over the Fed increases [2] Implications of Eroding Independence - Markets become unpredictable and volatile when politicians meddle with the central bank [3] - Eroding independence poses a giant red flag for anyone with investments [4]

Monetary Policy & Federal Reserve Critique - The speaker advocates for monetary regime change at the Federal Reserve, suggesting deeper problems beyond short-term interest rate adjustments [3][4] - The speaker criticizes the Federal Reserve's models, constructs, and meeting choreography, calling for a strategic approach aligned with government economic and national security goals [4] - The speaker questions the Federal Reserve's independence, arguing it shields the Fed from legitimate criticism and Congressional oversight, violating democratic governance norms [7][8] - The Federal Reserve has been operating at a loss since September 2022 and holds over 900 billion USD in unrealized capital losses [9] Interest on Reserves (IOR) & Banking System - The Federal Reserve is paying hundreds of billions of USD to commercial banks to keep money in cash reserve accounts instead of lending or investing [9] - Paying interest on reserves (IOR) originated as an emergency measure in October 2008 during the global financial meltdown [12] - The speaker suggests eliminating the Federal Reserve's use of paying interest on reserves and shrinking its portfolio to raise interest rates [17] Quantitative Easing (QE) & Inflation - Quantitative easing (QE) involved the Federal Reserve purchasing government assets to lower interest rates to zero [13][14] - The Federal Reserve credited banks' cash balance accounts for millions of USD with a keystroke when purchasing Treasury securities, creating base money [14][15] - The speaker argues that paying banks to keep money at the Federal Reserve is more lucrative than making loans, hindering financial intermediation [16]

Joining us now, the former chair of the National Economic Council of Adviserss under President Biden, Jared Bernstein. Welcome back, Jared. It's always good to see you.So, let's start with what the Commerce Secretary was talking about there and this kind of whiplash in the markets last week to news that Trump considered firing Federal Reserve Chair Jerome Powell. Markets then dropped, but Trump backed off, saying it was highly unlikely, but he doesn't rule it out. So, the Wall Street Journal reports Treasur ...