Jonathan Newman on Fed independence

Fed independence platitudes are like the robes worn by Supreme Court justices.  They provide the appearance of objectivity, sophistication, and sacredness.  Underneath, it’s all politics.

~ Jonathan Newman, "The Myth of Fed 'Independence'," The Misesian, July-August 2025

 

Whitney George on the impotence of the Fed's inflation-fighting tools

Today, the Fed is attempting to fight structural inflation over which it has no control.  It did not cause the reversal of China from a deflationary force to an inflationary contributor.  The Fed did not cause the political forces behind deglobalization.  And the Fed had nothing to do with decarbonization goals that have resulted in bad energy policies.  The recent historic 75 basis points rate hike and the next hikes that are expected is akin to administering electroshock therapy to a flu patient.

~ Whitney George, Sprott Focus Trust 2022 Semi-Annual Report, July 20, 2022

Jim Grant on Federal Reserve economists

Not just any brigade of really smart people could have convinced themselves that lending and borrowing and speculating played no part in the events leading up to the 2007-09 credit crisis or that record-high money growth and uniquely easy financial conditions would give no impetus to the inflation of 2021-and-counting.  The hundreds of doctors of economics on the payroll of the Federal Reserve System did not simply choose to ignore the facts in front of their faces.  Trained to look away, they arrived at their posts pre-blinkered.  What they were taught, and what they believed, was the very opposite of what the layman knows.

~ Jim Grant, "All except for the human beings," Grant's Interest Rate Observer, December 24, 2021

Larry Lepard on what Fed policy is doing to the middle class

They are causing the middle class to suffer.  For Jay Powell to say "the Fed doesn't cause wealth inequality" is just complete and utter bullshit.

~ Larry Lepard, interview with Daniela Cambone, Stansberry Research, 20:20 mark, September 24, 2021

Stan Druckenmiller on the Fed and inequality

I don't think there's been any greater engine of inequality than the Federal Reserve Bank of the United States the last 11 years.

~ Stanley Druckenmiller, May, 2021

Jim Grant on insolvency risk at the Federal Reserve

The Fed runs no risk of insolvency no matter how encumbered it becomes (it was leveraged 196.8:1 as of the March 24 statement date) or how exposed its bulging bond and mortgage portfolios might be to the risk of rising interest rates.  It doesn't matter because, in 2011, the Treasury agreed to become the guarantor of the Fed's solvency.

~ Jim Grant, "Chair Powell on the beaches," Grant's Interest Rate Observer, April 2, 2021

Almost Daily Grant's on the year in credit

A year to remember in credit, as the March panic has quickly given way to something resembling an opposing extreme.  Last week, the Goldman Sachs Financial Conditions Index reached its most accommodative level on record going back to 1990, while total corporate bond issuance foots to a record $2.5 trillion for the year according to Bank of America.  Thanks to that borrowing spree, gross leverage among investment grade and junk borrowers has reached record highs near four and six times Ebitda, respectively, the Financial Times reports today. 

Needless to say, the Federal Reserve’s March 23 announcement that it would, for the first time, directly purchase investment-grade corporate debt, loomed large in the bond market’s dramatic turnaround. Indeed, Jonny Fine, U.S. head of debt syndicate at Goldman Sachs, describes those interventions to the FT as: “the most important piece of central bank policymaking I have seen in my career.”

~ Almost Daily Grant's, December 22, 2020

Bob Rodriguez on Joe Biden's plan to add addressing black inequality to Fed's mandate

There's one other aspect that concerns me. We have a presidential election coming up. People will be on one side or the other. Looking specifically at one item of Biden's economic plan, it would be to effectively add a third mission to the Federal Reserve’s mandate. The Fed would need to address Black/minority equity and unemployment. This would further politicize the Fed. If this were to occur, I believe it would raise anxiety among many of our holders of Treasury securities, which total more than $7 trillion. If they decided to reduce their holdings, like what has been occurring over the course of the past year, this could put additional pressure on the dollar. It would also likely mean the Federal Reserve would have to be the buyer of last resort. This could increase the size of the Fed’s balance sheet even more so beyond the deficits that will occur over the next five years.

~ Bob Rodriguez, "Bob Rodriguez: We are in a Rolling Depression," by Robert Huebscher, Advisor Perspectives, September 7, 2020

Kevin Duffy on brand destruction

I don't recall a time of so much self-inflicted brand destruction: NBA, ESPN, mainstream media, Democratic Party, Federal Reserve, U.S. Dollar.

~ Kevin Duffy, tweet, September 10, 2020

Jim Grant on how leveraged finance leads to complacency

Maybe it's in the nature of leveraged finance that prosperity leads to complacency and complacency to error and error to crisis.  But how much more explosive is this chain of causation when complacency has an official sponsor in the Federal Reserve Board.

~ Jim Grant, "Chairman Powell meets Professor Goodhart," Grant's Interest Rate Observer, June 12, 2020

Jeffrey Tucker on counterfeiting

Consider this irony: the police were going after George Floyd for passing counterfeit money while the Federal Reserve has spent three months printing trillions of dollars and buying everything in sight.

~ Jeffrey Tucker, tweet, May 30, 2020

Jerome Powell on inequality and monetary policy

Inequality is something that’s been with us increasingly for more than four decades and it’s not really related to monetary policy.

~ Jerome Powell, Federal Reserve chairman, June 10, 2020

Paul McCulley on Fed buying 85% of Treasury's net debt issuance in the past 7 weeks

We’ve had a merger of monetary and fiscal policy. We’ve broken down the church-and-state separation between the two.

~ Paul McCulley, former chief economist at PIMCO, Bloomberg interview, May 15, 2020

(Credit to Philip Grant, editor of Almost Daily Grant's, for finding this quote. Also, according to May 15, 2020 ADG: "According to estimates from Bloomberg Economics, the Fed will purchase up to $3.5 trillion in government bonds this year, covering the bulk of an estimated $3.7 trillion fiscal shortfall.")

NY Fed's John Williams on the U.S. economy

[The U.S. economy is in a] very, very good place.

~ John Williams, New York Fed president, "New York Fed's Williams Sees Economy in 'Very, Very Good Place'," The New York Times, February 14, 2020

Jim Grant on liquidity

Liquidity is a psychological construct, perhaps as much as an arithmetic one.  Without a minimum quotient of speculative hope, even objectively liquid markets can malfunction.  It's confidence - in the future, in the dollar, in "the authorities," in the earning power of a business, in something or other - that makes the waters run...  In the dollar world, the fount of liquidity is the Federal Reserve...  Of course, the Fed merely proposes.  It's the "markets" - people changing their minds about price and value and buying and selling, lending and borrowing, accordingly - that dispose.

~ Jim Grant, "Gale-force liquidity," Grant's Interest Rate Observer, February 7, 2020

Irving Fisher anticipates the modern day Fed

42. If the debt-deflation theory of great depressions is essentially correct, the question of controlling the price level assumes a new importance; and those in the drivers' seats—the Federal Reserve Board and the Secretary of the Treasury, or, let us hope, a special stabilization commission—will in future be held to a new accountability.

~ Irving Fisher, "The Debt-Deflation Theory of Great Depressions," September 1933

Donald Trump on Janet Yellen and her low interest rate policy

I like her, I respect her…I do like a low interest rate policy, I must be honest with you.

~ President Donald Trump, interview with The Wall Street Journal, April 12, 2017

Kyle Bass: Goldman Sachs and Morgan Stanley would've failed without Fed bailouts

I think they made a really significant error during the crisis.  I don't think that there was enough of a flush of bad activity and bad investing back then, and the point is when the banks and investment banks came to the Fed and wanted the Fed to bail them out, the taxpayers ended up bailing out the bankers.  Goldman Sachs exists today because they were made a bank holding company and so does Morgan Stanley.  Back then, I don't think they would've made it if not for the Fed stepping in.

~ Kyle Bass, Wall Street Week interview, 6:29 mark, posted January 3, 2016

James Turk on Fedspeak, a.k.a. propaganda

The Federal Reserve often speaks of controlling expectations. That’s a politically correct way of describing propaganda.

~ James Turk

Marc Faber on the Fed: "They are going to bankrupt the world"

Nobody could have a more negative view of the Federal Reserve than I.  It is run by a disastrous group of academics, who have no clue about what is happening in the real world.  They believe money-printing can create jobs.  They are going to bankrupt the world.

~ Marc Faber, Barron's Roundtable, January 13, 2014