Introduces Richard Fisher and asks for his take on the day's events regarding judiciary checks on administration power and a victory for the Fed.
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Sees it as a victory for the Fed. Notes Powell is elected FOMC chair for the year and could potentially stay on the committee even with a new chairman.
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Draws historical parallel: Harry Truman put McChesney Martin as Fed chair expecting compliance, but he didn't comply. Kevin Warsh (referenced) must think about his legacy 20 years from now.
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Describes Kevin Warsh as smart, served with him for four years, had differences of opinion (Fisher dissented, Warsh did not).
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Asserts political effort to scare Chairman Powell away is not effective. Powell is a man of great integrity, will stick to his guns, and his Sunday night broadcast gave him enormous leverage.
Asks Fisher to connect the legacy/reputation discussion to current evidence for lowering rates, specifically referencing oil, inflation expectations, and Warsh's hawkish stance in 2008 while Fed was on hold.
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Agreed with Kevin Warsh that expanding the balance sheet drew enormous risks. The key question was how to exit after starting zero interest rates and balance sheet expansion.
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Argues that by signaling prolonged zero rates and balance sheet expansion, the Fed told the market to discount future cash flows to infinity. Some argue that overhang persists today, visible in private credit markets.