Mohamed El-Erian: Powell needs to resign to maintain the Fed's autonomy

요약 보기

파월 연준의장이 대통령의 공개 비판과 연준 관련 조사 확대로 독립성이 훼손될 위험이 커, 차선책으로 사임하는 것이 비용을 줄인다고 주장. 파월이 과거 인플레 '일시적' 판단, 늦은 금리인상, 캘리포니아 은행 문제 등에서 실수했다고 평가. 한편 미국 기업 실적과 혁신으로 증시는 사상 최고치 근처이며 시장은 미국 기업과 정부 리스크를 구분하고 있다고 진단. 금(사상최고)과 달러 약세도 언급.

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01. Our next guest among those who've said publicly that Fed chair pal should resign as he faces continuing criticism from the president over his policy decisions. Muhammad Alerian is Alon's chief economic adviser. He joins me now. It's nice to see you. Welcome. Thank you, Scott. I want to debate this because I'm trying to get my arms around this notion that the Fed share should resign with the markets booming, the economy strong, credit calm, and the only potential issue has nothing to do at all with his own policy.

02. He didn't put the tariffs in place. So why does it make sense that he should resign now? It's all about preserving the independence of the central bank. That is the guiding principle. Look, as you can imagine, I've discussed this with lots of people in markets, in the policy world, and they split into two, Scott.

03. Those who vehemently disagree with me, and those who agree with me, but don't want to go public. We all agree on the importance of central bank independence. We all agree that we are far away from the first best, whereby Pal completes his term and doesn't get attacked. What we disagree on is in the world of second best, what is the least costly option for the Fed?

04. Is it PAL staying and the attacks not just deepening but widening? You saw Speaker Johnson get into the act this week and you risk a fundamental long-term damage to the independence of the central bank. Alternatively, he steps down, deescalates the situation, and yes, there is a cost to independence in in the sense that the chair has stepped down, but you don't get the deep intrusion into the institution that undermine his operational autonomy.

05. I just don't get it. I mean, so he should leave because he's being attacked by the very person who put him in the job in the first place. the the president of that the precedent of that alone is is slippery. He should leave because he is the magnet of a growing number of investigations into an institution that risks losing its independence.

06. That's why he should leave. He should have the independence of the central bank as his primary objectives right now. What do you mean the growing number of investigations? The the building I mean come on. It's like, okay, would we be would we be talking about the building if if he was about ready to cut rates?

07. So, so, so let's talk about the building. You had you had Secretary Bent talk about the need to investigate non-monetary policy issues. You had Speaker Johnson talk about maybe we should look into the act and that's a very consequential statement. You have a ton of things hanging over the Fed. The policy mistake of inflation, the banking issues in California, the allegation of insider trading.

08. There's a ton of thing that people can investigate and in the process they will weaken the independence of of the central bank. This is way beyond the building. It is what Steve Bannon called attacking on across the board. So yes, I am worried about the independence of the central bank. And then the next person who assumes the role doesn't do what the president wants.

09. He takes the incoming fire. And and then what happens? Do we just then we just repeat ourselves over and over and over and over in a job that is supposed to be the most independent of politics in Washington. That that is the risk. But again, I stress, Scott, when you're in the world of second best, you need to to figure out what is the least costly option.

10. There is no first best. We all would love to have a first best. We all would love for Chal to finish his term in May and for the Fed not to be attacked, but that's not the world we're living in. And I doubt you believe that that's that's the world we're living in. Do you think he's been a good Fed chair?

11. I think he's made some major mistakes. I think the transitory inflation was a mistake. I think the late in hiking interest rates was a mistake. I think the what happened to the banks in in California under the very nose of the supervisors that was a mistake. Um so and his communication hasn't been that good.

12. There are lots and lots of studies that show that what when he is in his press conference the market is much more volatile than it's been under any other Fed share. Who should get credit for the fact that through all of this, the thick and thin of inflation and hiking and this that and the other that I got the market here at a record high extending it.

13. The Dow may close at a new record high. The labor market has remained solid. As I said, the credit markets have remained calm. He he and they don't get any credit for where we are through all of that. Not to mention the fact that most of this happened post COVID and it was skewed by the events of CO itself.

14. He didn't cause the supply chain issues that happened during the pandemic and then he had to deal with it. Not to mention the what many have said is the flawed policy of the prior administration pumping all of the money into the system on top of money on top of money on top of money. He didn't do any of that.

15. He had to deal with all of it though. He was late in reacting. Look, he warned us in August 2022, you will remember this about pain. He expected the economy to go into recession. It has surprised us. Who are are we thankful to? Corporate America. Earnings, innovation, strong balance sheet, entrepreneurial.

16. We have outpaced every single other advanced economy. It is about corporate America. And the marketplace is making a very rational bet. It says, I know the sovereign side is messy. trade tariffs, the Fed. I know it's messy, but I'm going to focus on corporate America. And this ability to differentiate between corporate America and sovereign America is the reason why we are going to have a 13th record high.

17. And if you don't believe me, look at where gold is. Look at where the dollar is. The gold has hit record after record and the dollar is still languishing. So if you look the president wants a weaker