Macro Musings with David Beckworth Mercatus Center Podcasts

James Bullard was the president and CEO of the Federal Reserve Bank of St. Louis from 2008 to 2023, and he is currently the dean of the Mitchell E. Daniels Jr. School of Business at Purdue University. James is also a previous guest of the show, and he rejoins David on Macro Musings to talk about his time at the Fed, FAIT, and the upcoming Fed framework review. Specifically, James and David also discuss how to improve the FOMC’s economic reporting, the case for implementing nominal GDP targeting, the future of R-star, and much more.
 
Transcript for this week’s episode.
 
James’s St. Louis Fed bio
James’s Purdue University profile
 
David Beckworth’s Twitter: @DavidBeckworth
Follow us on Twitter: @Macro_Musings
 
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Related Links:
 
*R-Star Wars: The Phantom Menace* - A presentation by James Bullard at the 34th Annual National Association for Business Economics (NABE) Economic Policy Conference
 
*Demand Shocks as Technology Shocks* by Yan Bai, Jose-Victor Rios-Rull, and Kjetil Storesletten
 
Timestamps:
 
(00:00:00) – Intro
 
(00:03:10) – Defining the St. Louis Fed and Bullard’s Fed Tenure
 
(00:09:58) – Comparing FAIT and Nominal GDP Targeting
 
(00:15:55) – Assessing the Current FAIT Framework
 
(00:25:37) – Evaluating the Recent V-Shaped Recovery
 
(00:29:28) – What to Expect from the Upcoming Fed Framework Review
 
(00:33:31) – Improving the FOMC’s Economic Reporting
 
(00:37:46) – The Case for Nominal GDP Targeting
 
(00:50:24) – The Future of R-Star
 
(00:53:52) – Outro

Josh Lipsky is the senior director of the Atlantic Council’s GeoEconomics Center. Josh joins David on Macro Musings to talk about the tools of financial statecraft, how they have evolved over the years, and their implications for digital currencies moving forward. Specifically, David and Josh also discuss how financial statecraft would be applied to a possible conflict with China, the current state of the cross-border payments system, the future of wholesale CBDC in the US, and much more.
 
Transcript for this week’s episode.
 
Josh’s Twitter: @joshualipsky
Josh’s Atlantic Council profile
 
David Beckworth’s Twitter: @DavidBeckworth
Follow us on Twitter: @Macro_Musings
 
Check out our new AI chatbot: the Macro Musebot!
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Related Links:
 
*Sanctioning China in a Taiwan Crisis: Scenarios and Risks* by Charlie Vest, Agatha Kratz, Juliana Bouchaud, Josh Lipsky, Kimberly Donovan, Charles Lichfield, and Niels Graham.
 
*The Geopolitical Imperative to Upgrade the Dollar* by Jordan Bleicher and Josh Lipsky
 
*Stablecoins and National Security: Learning the Lessons of Eurodollars* by Timothy Massad
 
Timestamps:
 
(00:00:00) – Intro
 
(00:04:02) – The Russia Sanctions as an Example of Financial Statecraft
 
(00:10:14) – The Financing of the Russia-Ukraine War
 
(00:14:08) – The Delicacy of Legal Precedents and the REPO Act
 
(00:19:10) – Breaking Down the Tools of Financial Statecraft
 
(00:22:08) – Applying Financial Statecraft to a Possible China Conflict
 
(00:28:52) – Cross-border Payments and the Global Status of the US Dollar
 
(00:34:05) – Breaking Down the Development and Geopolitical Importance of mBridge
 
(00:38:34) – The Future and Importance of Wholesale CBDC in the US
 
(00:43:28) – Private Sector Alternatives to CBDCs
 
(00:45:05) – Where is the CBDC Conversation Headed?
 
(00:49:25) – Closing Thoughts: The 80th Anniversary of Bretton Woods and the Future of Dollar Dominance
 
(00:52:48) – Outro

Steven Kelly is the Associate Director of Research at the Yale Program on Financial Stability and is also a returning guest to the podcast. Steven rejoins David on Macro Musings to talk about the financial stability implications of the discount window. David and Steven also discuss the issues with FHLBs, how to fix the challenge of reporting requirements, restarting the term auction facility and committed liquidity facilities, and much more.
 
Transcript for this week’s episode.
 
Steven’s Twitter: @StevenKelly49
Steven’s blog: Without Warning
 
David Beckworth’s Twitter: @DavidBeckworth
Follow us on Twitter: @Macro_Musings
 
Check out our new AI chatbot: the Macro Musebot!
Join the new Macro Musings Discord server!
 
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Related Links:
 
*Domestic Liquidity Provision During Potential Crises* - a panel discussion featuring Steven Kelly, Bill Nelson, Susan McLaughlin, and Luc Laeven at the Federal Reserve Bank of Atlanta’s 2024 Financial Markets Conference
 
*Weekly Fed Report Still Drives Discount Window Stigma* by Steven Kelly
 
*The New Bagehot Project* - an initiative by the Yale Program on Financial Stability
 
*Forward Guidance: Something Old and Something New: Two Potential, Beneficial Discount Window Facilities* by Bill Nelson
 
Timestamps:
 
(00:00:00) – Intro
 
(00:01:02) – The Yale Program on Financial Stability and Steven’s Role
 
(00:07:04) – Building a Resilient Regulatory Framework
 
(00:12:45) – Addressing Issues in the Discount Window
 
(00:21:37) – Responding to Criticism of Liquidity Regulations
 
(00:27:22) – Fixing the Challenge of Reporting Requirements
 
(00:33:29) – Restarting the Term Auction Facility and Committed Liquidity Facilities
 
(00:37:24) – Addressing the Issue with FHLBs
 
(00:45:26) – Additional Thoughts from the Atlanta Fed Conference Panel
 
(00:50:59) – Could Increased Use of the Discount Window Cause a Shift in the Fed’s Operating System?
 
(00:54:44) – Outro

Ernie Tedeschi is the Director of Economics at the Budget Lab and is a visiting fellow at the Psaros Center for Financial Markets and Policy. Recently, Ernie was a chief economist at the White House’s Council of Economic Advisors, and he is also a returning guest to the podcast. Ernie rejoins Macro Musings to talk about the CEA and some of his recent work on the political risks to the US safe harbor premium and R-star. David and Ernie also discuss the benefits and healing properties of a high employment economy, Ernie’s favorite measures of the labor market, the current and past trends in the path of R-Star, and more.
 
Transcript for this week’s episode.
 
Ernie’s Twitter: @ernietedeschi
Ernie’s Budget Lab profile
 
David Beckworth’s Twitter: @DavidBeckworth
Follow us on Twitter: @Macro_Musings
 
Check out our new AI chatbot: the Macro Musebot!
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Related Links:
 
*Political Risks to the U.S. Safe Harbor Premium* by Ernie Tedeschi
 
*Recent Movements in [R-star]: The Most Important Interest Rate That You have Never Heard Of* by Ernie Tedeschi
 
*The 2024 Economic Report of the President* by the White House Council of Economic Advisers
 
*The Fed Governor Who Proved Larry Summers Wrong* by Nick Timiraos
 
*Summers, Blanchard Say Waller’s ‘Soft-Landing’ Paper Has Errors* by Craig Torres
 
Timestamps:
 
(00:00:00) – Intro
 
(00:01:49) – Ernie’s Experience at the CEA
 
(00:09:15) – The Benefits and Healing Properties of a High Employment Economy
 
(00:15:28) – Ernie’s Favorite Measures of the Labor Market
 
(00:20:17) – The Broader Debate Surrounding Labor Market Measures
 
(00:24:07) – The Basics of a US Safe Harbor Premium
 
(00:28:56) – Political Risk vs. Exorbitant Privilege
 
(00:33:46) – Debt Ceiling Crises as a Political Risk Scenario
 
(00:37:01) – Fiscal Dominance as a Political Risk Scenario
 
(00:43:25) – Outlining the Distinction Between Different R-Stars
 
(00:48:39) – Past and Current Trends in the Path of R-Stars
 
(00:54:46) – Assessing the Sources of High Productivity
 
(00:58:22) – Outro

Jeffrey Lacker is a senior affiliated scholar at the Mercatus Center, but has also previously worked at the Federal Reserve Bank of Richmond from 1989 to 2017, serving as its president from 2004 to 2017. Jeff is also a returning guest to podcast, and he rejoins Macro Musings to talk about Fed governance issues and the lessons learned from the recent inflation surge. Specifically, David and Jeffrey also discuss the issue of maximum employment, how the Fed could reform its governance structure, what the central bank should address during the next framework review, and more.
 
Transcript for this week’s episode.
 
Jeffrey’s Mercatus profile
Jeffrey’s website
Jeffrey’s Richmond Fed archive
 
David Beckworth’s Twitter: @DavidBeckworth
Follow us on Twitter: @Macro_Musings
 
Check out our new AI chatbot: the Macro Musebot!
Join the new Macro Musings Discord server!
 
Join the Macro Musings mailing list!
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Related Links:
 
*Governance and Diversity at the Federal Reserve* by Jeffrey Lacker
 
*What Lessons Should the Federal Reserve Learn from the Recent Inflation Surge?* Presentation by Jeffrey Lacker at the 2024 UC San Diego Economics Roundtable Lecture Series
 
*Central Bank Undersight: Assessing the Fed’s Accountability to Congress* by Andrew Levin and Christina Parajon Skinner
 
*Reform the Federal Reserve’s Governance to Deliver Better Monetary Outcomes* by Dan Katz and Stephen Miran
 
*Don’t Audit the Fed, Restructure It* by Michael Belongia and Peter Ireland
 
*Restoring the Promise of Federal Reserve Governance* by Peter Conti-Brown
 
*Jim Hamilton on Econometrics, Energy Markets, and Low Interest Rates* by Macro Musings
 
Timestamps:
 
(00:00:00) – Intro
 
(00:04:35) – Jeffrey’s View on “Monetary Federalism”
 
(00:10:01) – Reducing the Number of Regional Fed Banks
 
(00:13:11) – Addressing Peter Conti-Brown’s Proposals for Fed Governance Reform
 
(00:18:23) – Addressing Andy Levin and Christina Skinner’s Proposals for Fed Governance Reform
 
(00:23:07) – Altering the Fed’s Responsibilities as a Bank Regulator
 
(00:29:21) – What Lessons Should the Federal Reserve Learn from the Recent Inflation Surge?
 
(00:36:14) – The Issue of Maximum Employment
 
(00:46:38) – Evaluating the Fed’s Response to the Recent Inflation Episode
 
(00:50:45) – What Should the Fed Be Addressing During the Next Framework Review?
 
(00:55:01) – Outro

Mickey Levy is Chief Economist for the Americas and Asia for Berenberg Capital Markets, a Wall Street veteran, and a longstanding member of the Shadow Open Market Committee. He and his co-author, Charles Plosser, also have a new paper out titled, *The Fed’s Strategic Approach to Monetary Policy Needs a Reboot.* Mickey joins David on Macro Musings to discuss this paper and its implications for the upcoming Federal Reserve framework review. David and Mickey also discuss the impact and importance of a flat Phillips curve, the Fed’s policy mistakes in the wake of its new flexible average inflation targeting (FAIT) framework, recommendations for how the central bank should approach the next framework review, and much more.
 
Transcript for this week’s episode.
 
Mickey’s Twitter: @mickeylevy
Mickey’s website
 
David Beckworth’s Twitter: @DavidBeckworth
Follow us on Twitter: @Macro_Musings
 
Check out our new AI chatbot: the Macro Musebot!
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Related Links:
 
*The Fed’s Strategic Approach to Monetary Policy Needs a Reboot* by Mickey Levy and Charles Plosser
 
Timestamps:
 
(00:00:00) – Intro
 
(00:01:50) – Mickey Levy’s Career Path and Takeaways from the Most Recent Hoover Monetary Policy Conference
 
(00:07:24) – What Shaped the First Framework Review?
 
(00:11:56) – The Fed’s Addition of “Symmetric” Inflation
 
(00:16:32) – Price Level Drift, Deflationary Fears, and Inflation Expectations at the Fed
 
(00:23:33) – The Impact and Importance of a Flat Phillips Curve
 
(00:27:34) – Breaking Down the Elements of FAIT and the Fed’s Policy Mistakes
 
(00:42:11) – Recommendations for the Fed’s Upcoming Framework Review
 
(00:57:54) – Outro