All right, so let's have a great conversation and I bring in with me right here in the flesh. Look at us. We're finally together in the same place, Kevin Green is with me joining me and um we have a lot to cover, Kevin, but it's great to see you live here at the Schwab Impact Conference and we kick it off.How are you doing this morning. >> It's doing pretty good. Look, the market has recovered.If you looked at overnight trading, it was actually getting pretty dire out there, but we are seeing some buyers re ...

Core Insights - The Federal Reserve's Standing Repo Facility (SRF) usage reached a record high since its inception in 2021, with financial firms borrowing slightly over $10 billion [1][3] - The collateral for this borrowing included $2 billion in Treasury bonds and $8.2 billion in mortgage-backed securities, indicating a significant reliance on the SRF despite its small volume compared to the broader repo market [2][3] - The increase in SRF usage coincides with rising money market rates, suggesting that the Fed's quantitative tightening (QT) may have removed too much liquidity from the financial system [3][4] Summary by Sections SRF Usage - The SRF recorded over $10 billion in loans, marking the highest usage level since its launch [1] - Collateralized borrowing consisted of $2 billion in Treasury bonds and $8.2 billion in mortgage-backed securities [2] Market Conditions - The uptick in money market rates is attributed to a rise in the federal funds rate, which is the Fed's primary tool for economic influence [3] - The current QT has reduced the Fed's balance sheet from a peak of $9 trillion in 2022 to $6.6 trillion [6] Future Expectations - Many analysts anticipate that the Federal Open Market Committee will lower the federal funds rate range by a quarter percentage point and may soon conclude the QT process [5] - The potential end of QT could alleviate downward pressure on market liquidity and allow money market rates to decrease [6][7]

Monetary Policy & Central Bank Role - The central bank's most important job is to prevent depressions and hyperinflations [1] - Independence of monetary policy is critical for the central bank's success [1] - The Federal Open Market Committee is an independent group with a monumental task [2] Mandates & Responsibilities - The role will be carried out pursuant to the mandates assigned by Congress [2] - Opinions and decisions will be based on analysis of the macroeconomy and what's best for its long-term stewardship [2] - The intention is to preserve independence and serve the American people to the best of ability [2]

Legal & Governance - The core legal issue revolves around whether there is sufficient "cause" for the president to remove Lisa Cook from the Federal Reserve Board, as the Federal Reserve Act does not define "cause" [1] - "Cause" generally implies inefficiency, neglect, or malfeasance, and it's premature to determine if the allegations against Lisa Cook meet this standard without an investigation [2] - Lisa Cook's lawyer is expected to file a lawsuit challenging the firing, with the main arguments focusing on whether the president satisfied the "for cause" standard and whether she continues to serve during litigation [3][7] - The Federal Reserve reaffirms its commitment to transparency, stating that removal protections serve as a safeguard, allowing governors to be removed only for cause [8] - The Federal Reserve will abide by any court decision [3] Federal Reserve Board Dynamics - The board of governors can continue to function appropriately even during this litigation, as Lisa Cook is only one member [9][10] - One of the seven governor seats is in flux due to Brianna Keilar's resignation and the unconfirmed nomination of Stephen Moran [10] Political Implications - The potential removal of Lisa Cook is viewed as a play by President Trump to control the Federal Open Market Committee (FOMC), which influences interest rates [11] - The Federal Reserve Board will have the opportunity to confirm or bar the reappointment of regional Reserve Bank presidents who serve on the FOMC in February [11] - Removing Lisa Cook could create a deadlock on the Federal Reserve Board, potentially impacting the reappointment of Reserve Bank presidents [11][12]