Rob Kaplan

politically independent Federal Reserve, independent central bank, which means that the Fed, at least as it relates to monetary policy and setting the Fed funds rate, does it independent of political pressures and political considerations. So why is that so important? Because there are times, the last few years is a great example, where it's very unpopular to

politically independent Federal Reserve, independent central bank, which means that the Fed, at least as it relates to monetary policy and setting the Fed funds rate, does it independent of political pressures and political considerations. So why is that so important? Because there are times, the last few years is a great example, where it's very unpopular to

for the Fed to do what it needs to do. It needed to raise rates dramatically in order to bring inflation down. It's very unpopular. You want to take that out of the political sphere and put it in an independent organization that can make these tough decisions. Okay. So now we move to today. We've got these structural changes. Growth is slowing.

for the Fed to do what it needs to do. It needed to raise rates dramatically in order to bring inflation down. It's very unpopular. You want to take that out of the political sphere and put it in an independent organization that can make these tough decisions. Okay. So now we move to today. We've got these structural changes. Growth is slowing.

I think the president, understandably, and others are hoping the Fed will be able to see their way clear to lower rates. However, there's an inflation issue. And I think Jay Powell, as I said, is trying to jawbone at a minimum that issue. And he wants to make sure that they balance their dual mandate of full employment and price stability. And so...

I think the president, understandably, and others are hoping the Fed will be able to see their way clear to lower rates. However, there's an inflation issue. And I think Jay Powell, as I said, is trying to jawbone at a minimum that issue. And he wants to make sure that they balance their dual mandate of full employment and price stability. And so...

An independent Fed gives a lot of confidence to the financial markets, in my opinion, makes them more willing to buy the dollar, buy duration, buy US assets. But the other thing I would say is J-PAL doesn't set the Fed funds rate. There's a vote. Now, the voters are all the governors and a portion of the presidents, those votes rotate. I ran the Dallas Fed. I voted on a rotating basis.

An independent Fed gives a lot of confidence to the financial markets, in my opinion, makes them more willing to buy the dollar, buy duration, buy US assets. But the other thing I would say is J-PAL doesn't set the Fed funds rate. There's a vote. Now, the voters are all the governors and a portion of the presidents, those votes rotate. I ran the Dallas Fed. I voted on a rotating basis.

Even if J-PAL were gone, I can tell you I don't think there's a consensus around the table to cut rates in the May meeting. They're open to it, but that's even if J-PAL wasn't there. And so I think there's some realization that institutionally you've got to build a consensus. It's got to be based on facts and analysis and debate.

Even if J-PAL were gone, I can tell you I don't think there's a consensus around the table to cut rates in the May meeting. They're open to it, but that's even if J-PAL wasn't there. And so I think there's some realization that institutionally you've got to build a consensus. It's got to be based on facts and analysis and debate.

And I think they may have concluded that removing J-PAL, one, would be legally problematic, but also would be institutionally very unsettling to the world. And it might not cause any change. J-PAL will leave next year, first half of next year. They will pick someone new. You want that new person to be seen as also independent, I think.

And I think they may have concluded that removing J-PAL, one, would be legally problematic, but also would be institutionally very unsettling to the world. And it might not cause any change. J-PAL will leave next year, first half of next year. They will pick someone new. You want that new person to be seen as also independent, I think.

and preserving the independence of the Fed and not make any pre-commitments to the administration about what he or she will or won't do. And I think they're going to have to be careful about that.

and preserving the independence of the Fed and not make any pre-commitments to the administration about what he or she will or won't do. And I think they're going to have to be careful about that.

On the being late point, I've been critical of the Fed in 2021 and 22 that I thought the Fed should

On the being late point, I've been critical of the Fed in 2021 and 22 that I thought the Fed should

start tapering bond buying soon sooner than they did and start looking at raising rates sooner so in that regard you could criticize them and they might criticize themselves they were somewhat late the best analogy that i can think of is you're driving on the highway and you're going 65 or 70 miles an hour and people are in the back seat and they want you to go faster the same time let's take that same highway

start tapering bond buying soon sooner than they did and start looking at raising rates sooner so in that regard you could criticize them and they might criticize themselves they were somewhat late the best analogy that i can think of is you're driving on the highway and you're going 65 or 70 miles an hour and people are in the back seat and they want you to go faster the same time let's take that same highway

but there's a rainstorm, there's a hailstorm, there's terrible visibility. I don't think anybody's going to be beating on you to go 65, 70 miles an hour. They're going to say, you know, I'm going to go 35. And I don't think anybody's going to say, you're late, you're slow. We're going to get there 10 minutes later. You'd say, let's get there in one piece.

but there's a rainstorm, there's a hailstorm, there's terrible visibility. I don't think anybody's going to be beating on you to go 65, 70 miles an hour. They're going to say, you know, I'm going to go 35. And I don't think anybody's going to say, you're late, you're slow. We're going to get there 10 minutes later. You'd say, let's get there in one piece.