00:00What impact will that have if that is the source of funding in your mind versus something like T-bill
00:05sales?
00:07So I fully agree with Michael McKee's summary of it.
00:10And this is a temporary measure.
00:12It will have.
00:13And when we're seeing the response with interest rates this morning, I think that makes a lot of sense given
00:18the announcements.
00:19But we should remember the general fund is not there for this type of, you know, working on the markets.
00:26I mean, this really has earmarked to programs that the government is spending money on.
00:31And so there are real limits to how much this intervention can do in markets.
00:35But it can do a little bit temporarily.
00:39Now, you've criticized the Fed chair and the Fed for not showing their work, not explaining why they, their stance
00:46on interest rates.
00:48So if the Fed continues to refuse to show its work, does this introduce the prospect of potential policy error?
00:56So first, I want to be clear.
00:58The person that's not sharing their work is the chair.
01:02Kevin Walsh has chosen to have, you know, more of a 30,000-foot view of monetary policy.
01:07It can make a lot of sense for someone who's coming in talking about regime change.
01:10He wants to get us focused on the big ideas.
01:13But if you look at the committee and, like, say, from the minutes that we got last week, they are
01:17giving details.
01:18They're explaining why they're still on hold.
01:20They're explaining what they're looking for in terms of inflation.
01:22So the details are still there at the Fed.
01:24It's just the sequencing has been a little unusual.
01:28But, again, that could just be part of the beginning of having a new chair that's focused on regime change.
01:33But I do think we're at a point where we need to hear more of those details directly from the
01:38Fed chair.
01:39I think that will really calm a lot of nerves if we hear him articulate where the committee is.
01:44I'm sorry to go back to this, Claudia, but just one more thing on the TGA, this idea of drawing
01:48this down, even though there's no emergency.
01:51Is there something that looks more like shadow QE?
01:55Because in that effect, you are increasing the money supply.
01:58You're putting more out there on bottles of cash that would have been locked away in the TGA.
02:03Does that have an impact of stimulating the economy by unleashing this account?
02:09So I'd be careful about drawing too tight a connection to quantitative easing.
02:15The Treasury can't create reserves.
02:18They can't create money.
02:19It's a little bit of like shuffling the deck chairs around in terms of what they're doing.
02:24It can have some effect that looks a little bit like QE.
02:28But really, it's the Federal Reserve that could go out and create money and really accomplish this, bringing the long
02:35end down, bringing the short end down.
02:37But that's not a tool that the Treasury has access to.
02:40So they're very limited in what they can do.
02:43So I'd be a little cautious in calling this an even QE light.
02:46It's really not.
02:47It's really not.
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