Bob Murphy

If the Fed all of a sudden decides not to accommodate that, that could be very expensive.

Just one last consideration.

If right now the outstanding debt is like $38 trillion.

So just having the treasury yield curve shift up by one percentage point across the maturities, that's an extra $380 billion in annual interest expense.

So that right there, I mean, that's more than a lot of countries, their total budget.

So I'm just saying that, yes, I think the White House, given its plans and what they wanted to do, all things considered, needed the Fed to be on board.

And this is their way of making sure that happens.

Right.

And so, yes, with all this stuff, it's it's theater that.

So I understand why people are concerned about the sort of, you know, heavy handed moves of the Trump administration, like looking into Lisa Cook and things like that.

And that, yes, it's it's violating the normal decorum at the very least.

But the idea that the Federal Reserve is this independent thing and you've just got a bunch of bean counters who are drawing supply and demand curves and taking first derivatives on the chalkboard.

And that's what's saying, that's crazy.

Just to give one example, I remember a lot of my academic colleagues were so shocked when the financial crisis hit and then the Federal Reserve

in the fall of 2008 started announcing they were paying interest on reserves.

And so I knew a lot of my colleagues were stunned because, oh, no, the Fed should be providing liquidity right now.

Why would they be paying banks to not make loans to people?

And, oh, the mystery is solved, though, when you realize the Fed is owned by the banks and it was just, you know, giving them money.

Like that was an extra flow of income.

Like then all of a sudden the mystery is solved, right?