Adam Posen

He can stay on the committee if he decides he needs to, in which case he'll still have a vote, and in which case it is possible that the committee votes to make him chair, even if he's no longer chair of the Board of Governors.

The second thing is if Chair Powell, for whatever reason, deciding he wants to depoliticize, deciding he's had enough, whatever reason, I have no idea, were not to continue on the committee as a governor, then President Trump would very quickly have a majority of his appointees on the Board of Governors, but he still wouldn't have a majority in the FOMC.

The ultimate effect, though, is paralysis because there would be very split votes and no clear directions.

I think it does.

I think like a lot of things that have gone on in the economic sphere and other spheres under the Trump administration this term.

You're making pretty irreversible changes to how much people can trust in the power of institutions.

The Fed has even legally had a special status with respect to monetary policy to be more technocratic, to be more independent, going back to that word.

The Supreme Court has affirmed that, although they're narrowing it over time.

I mentioned earlier, Juana, the idea that expectations matter because it's not just what the Fed decides, it's what people think they'll decide when inflation comes.

And so I think this will ultimately result in the Fed getting more rational no matter who Trump appoints after the next inflation, but that the inflation will stay higher and stay around longer.

because people will expect less from the future Fed.

And that will be a cost that we'll all pay for an ongoing period.

Thank you.