00:00 Speaker A
I also wanted to ask you about the composition of the Federal Reserve. As we know, and as Lael Brainerd just alluded to, it’s a very divided fed right now. Um, but we’re also going to of course get a change in leadership at the Fed next year. And the White House’s sort of rhetoric about the Fed has faded to some extent. Um, but who do you think is the best choice to lead the FOMC next? And are you concerned about the White House sort of, again, leaning on that person when it comes to policy decisions?
00:30 Speaker B
Well, a few a few ways to look at the the selection process. One, I think that the panel of nominees that are being considered, uh, are all pretty well qualified, uh, to be Fed chair. I have my particular favorites, uh, but it
00:45 Speaker A
Want to tell us who they are?
00:46 Speaker B
Well, you know, uh I actually happen to be a big fan of Kevin Warsh. Uh and I would biased because he’s a bit of more of a monetarist uh and I do believe money supply still matters. Um, but uh but Mickey Bowman’s amazing. Um, and uh and and maybe more of a dark horse uh is uh Kevin uh uh Hassett and then uh I’m a big fan of Chris Waller as well. So, we have a good selection of potential uh candidates and notice I sort of picked more uh of the economist uh background uh uh personalities if you will. Having said so, I believe ultimately, um, it’s not the first time we’ve seen political pressure put on Fed chairs. We go back to Nixon, we go back to Lyndon Johnson. There’s a long history of presidents trying to put pressure on on the Fed chair. Um, and strong, uh Fed chairs are important. Independence is important, but let’s remember the Fed’s also subject to congressional oversight. So not fully independent from policy oversight. They have two mandates. The dual mandate of stable employment and stable prices is still part of what they’re obligated to uh to work towards uh and engineer. Having said all of that,
01:56 Speaker B
no matter what happens, I think we are looking at a more dovish Fed composition, and that means we’re back to my concept of and belief in much lower neutral rate uh going forward, which should be helpful for the interest interest sensitive part of the economy, the lower end consumer to some level. Uh for example, along with in 2026 some tailwinds that we’re going to have, particularly with the one big beautiful bill, there’s some tax benefits in there that will also be rather stimulative. So I think all of this keeps us out of any kind of recession risk, but it lends us to more of a neutral policy.