Can the Fed Do Anything But Fail?

Published on
September 19th, 2022
Duration
41 minutes


Can the Fed Do Anything But Fail?

The Essential Conversation ·
Featuring Thomas Hoenig and Harry Melandri

Published on: September 19th, 2022 • Duration: 41 minutes

With the September Federal Open Market Committee meeting this week in the aftermath of the August Consumer Price Index data coming in hotter than expected last week, investors are now 100% certain of a 75-basis-point rate hike come Wednesday. Risks for the Fed run both ways: It could tighten the economy into deep recession, or it could prematurely pivot and let inflation run its own elevated course. Dr. Thomas Hoenig, the longest-serving Federal Reserve Bank president in history, joins MI2 Partners’ Harry Melandri to unpack the factors the central bank faces as it considers next steps in its policy program, including quantitative tightening. Dr. Hoenig, who led the Kansas City Fed for 20 years, was vice-chair of the FDIC from 2012 to 2018, and is now a distinguished senior fellow at the Mercatus Center, compares present circumstances to the 1970s, identifying mistakes the Fed must avoid repeating this time around. As Dr. Hoenig and Harry discuss, the institution’s long-term credibility is at stake. Recorded on September 14, 2022.