The Federal Reserve is among the foremost drivers of inequality in America. By failing to deliver on its inflation mandate, the Fed allowed class and generational disparities to grow worse, expanding the divide between asset-owners and lower-income Americans. The Fed must

Some really thought-provoking ideas in this issue of The International Economy on what out-of-the-box economic or political development may surprise in ten years, in addition to Treasury Secretary Scott Bessent ‘s views on reforming the Fed (and central banking). ⬇️

HE WENT THERE--Treasury Secretary Scott Bessent points out the Federal Reserve's skew toward Democrats & away from Republicans in the past decade, including among the 12 Reserve Bank boards, which has clearly impacted its policy decisions (aka "keep Liz happy"). Link in thread below:

.The International Economy asked experts to highlight a shocking development that could unexpectedly materialize by 2035. This outside-the-box speculation on matters that today seem improbable, if not impossible, offers plenty to ponder. international-economy.com

.Treasury Secretary Scott Bessent laid out his views on Fed reform in an essay and interview for The International Economy. Read it at international-economy.com

If you're feeling relaxed and complacent, here's a head-spinning list of potential out-of-left-field shocks, courtesy of The International Economy Can you guess what mine is? And don't miss the excellent essay on the Fed by Treasury Secretary Scott Bessent in the same issue international-economy.com

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Great insight from Treasury Secretary Scott Bessent's latest monetary-policy assessment The International Economy: The core problem is structural: the Fed now regulates, lends to, and sets the profitability calculus for the very banks it oversees. This is an unavoidable conflict that blurs accountability and

But that doesn’t mean the dollar will lose the unique role it plays in intl transactions. Call me Panglossian, but I remain steadfast in my conviction that the $ will retain that status, for reasons spelled out in this interview for The International Economy. dropbox.com/scl/fi/zuhjv6h…

Stablecoins could cut reliance on bank lending, BoE governor says ft.com/content/2c4226… via Financial Times

“We need a kind of European stock exchange so that successful companies such as biotech firms from Germany do not have to go to the New York Stock Exchange,” said Merz in a speech to the Bundestag. ft.com/content/040f48… via Financial Times

Roughly half of geostationary satellite signals, many carrying sensitive communications, have been left entirely vulnerable to eavesdropping. Researchers say that they’ve warned companies and agencies whose sensitive data they found exposed. wired.com/story/satellit…

New piece that links the 2024 election, populism, and tech investment. jamesalewis.substack.com/p/the-tyranny-…

"More out of the ordinary was Bessent’s 6k word essay in The International Economy, which criticised the Fed for exceeding its mandate by using nonstandard monetary policies such as QE after fin crisis. international-economy.com/TIE_Sp25_Besse… ft.com/content/96ac2e… via Financial Times Treasury Secretary Scott Bessent

Waller has proposed “skinny” master accounts for many new digital-bank charters, lowering the barrier to one of the most valuable benefits of being a bank w/o the regulatory muss and fuss. This would indeed speed crypto’s “golden age,” but at grave risk. How to innovate and yet

A federal appeals court on Friday upheld the Federal Reserve’s authority to decide which banks can access its payment system, rejecting a crypto-focused bank’s legal fight for a “master account” with the central bank. subscriber.politicopro.com/article/2025/1…

Bessent’s argument seems to be a small-government one. In his piece for The International Economy, he said the Fed’s asset purchases helped make room for massive spending by Congress in the wake of Covid and fueled wealth inequality. politi.co/43pHYho via POLITICO

From Mohamed A. El-Erian: The current affordability crisis will not be solved simply by bringing inflation down from current 3% to the Fed’s target of 2%. What is required is an approach that also addresses income side of the standard of living calculus. ft.com/content/88b0f1… via Financial Times

Banks, investors and officials are concerned about signs of stress in an arcane but vital corner of US financial system. NY Fed solicited feedback from primary dealers, mostly banks that underwrite the government's debt, on Fed’s standing repo facility. ft.com/content/395f92…

China is one of the two biggest economies in the world, @eswarsprasad says. “It would be nice to know what is really going on.” ft.com/content/5b9e74… via @ft