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00:00 Kevin
Let’s talk about some of those changes, Dennis, that he’s talked about, right? Warsh for example, curious to get your take here. He’s called for example, he thinks the Fed should reduce the size of the balance sheet. What do you think of that, Dennis? Is that smart policy? And for for investors who are listening right now, if we remove that kind of liquidity from the system, you know, what could that mean for the stock market, Dennis?
00:41 Dennis
Well, I’ll give you a uh off the top of my head response. This is a really, really technical area of you know, the reserve levels that the system wants and needs, uh therefore whether to have an ample or scarce reserves approach to things. Kevin seems to want to kind of return to a simpler
01:14 Dennis
um and really historic positioning of the Fed with scarce reserves, small footprint in financial markets, smaller uh smaller balance sheet therefore.
01:31 Dennis
Whether that can be done uh without some financial stability uh turbulence associated with it, I just don’t know. I think it’s going to be a more technical path than simply wishing that you could return to the past.
01:48 Kevin
Here’s a couple of other changes he’s made, Dennis. In to get your insight. I’ll double barrel this one. One, reduced staff at the Fed. That’s interesting. Also, less Fed speak, Dennis. Too much talking going on. What do you make of those two?
02:08 Dennis
Well, I’ll take the second one first. The too much Fed speak has been a complaint for years and years and years. Uh the the uh the word cacophany has been used a lot. Um you know, there’s something to be said for that at the same time,
02:30 Dennis
the Reserve Bank presidents, particularly who speak uh very freely and go out frequently, are in many respect communicating to parts of the country that they uh they oversee. And uh it’s viewed by the public, I think in in various districts in the country as a very valuable connection with the Fed and understanding more of what the Fed is up to.
02:56 Dennis
So I think uh, you know, maybe he can bring greater order to that. We’ll see. I’m not so sure.