Conspiracy Theories About the Fed - Robin J Brooks - Substack
robinjbrooks.substack.com
Some FOMC members may be engineering rate-hike positions to put incoming Fed chair Warsh on a collision course with the White House before he even starts.
Principal-Agent ProblemGame TheoryInstitutional IndependencePolitical Signaling
Theory Briefing
- A theory circulating suggests certain FOMC members are locking in rate hikes to box Warsh into decisions that anger the White House.
- If Warsh inherits a hawkish rate path he didn't set, any conflict with the administration becomes his problem, not theirs.
- The Fed's formal independence makes it a prime arena for this kind of internal political maneuvering — decisions are hard to reverse quickly.
- Whether this is coordinated strategy or coincidental policy preference is exactly what the conspiracy framing can't resolve.