Richard Clarida

to allow the economy to reach its potential.

I do.

I think that they've pretty much signaled that the existing Fed, before Kevin Warsh arrives, is happy right now to step back, see how the economy evolves with its energy shock.

It is interesting, though, that they did indicate that most of the members of the committee still see at least one cut this year and next year as appropriate.

And so I would think that over time,

Kevin Warsh will be able to get the committee to cut rates at least a couple more times, but it may not happen for a while.

Well, you'd have to look pretty long and hard to find that.

Are we back to the Old or the New Testament?

Models are tools, but they're backward-looking.

And in particular, I think oftentimes the argument that Governor Myron has made is he has a personal individual belief

that the neutral interest rate in the U.S.

is well below the current level and well below where the committee believes.

You know, he could be right, but I don't think that is the view on the committee, so I think he'll continue to be a minority view on that.

Well, I think it's pretty clear now that in order to become a Fed chair, you've got to be confirmed by the Senate.

And to be confirmed by the Senate, you have to have an affirmative vote in the banking committee.

And right now, Senator Tillis has indicated he will not support any Fed nominee, including Warsh, who he thinks would be a good choice.

until the current situation with the Justice Department, subpoenas, and the Fed is resolved.

And Powell more or less said that himself, that he's not going anywhere until it's resolved.

We do think it will be resolved.

We do think eventually Warsh becomes chair.