Us this evening journalist gina. Here to talk about her very timely and informative new book limitless. The Federal Reserve takes on a new age of crisis. Now weve all been hearing a lot about the fed in recent, whether helping to stave off total economic collapse during the 28 financial meltdown or countering the shocks of the covid 19 pandemic or most struggling to lower. As gina makes clear in her new book, these crises along with the actions of some pivotal central bankers like, the current fed chairman, jay powell, have fundamentally changed the feds purpose and function in american society. The fed has taken its Emergency Powers to new, gina writes, stretching its mission as lender of last resort and purchasing backed debt in massive sums. Its gone from insisting that social issues are not in its domain to flying pride, flags and shaping conversations about racial, gender and, geographic inequity with research and expert advice. Fed officials often talk about staying in their lane, but lane, gina observes, has into an avenue. Gina is very well positioned to tell the story of the feds extended and its and its vast influence. Shes been covering the fed and economic for more than a decade. First for Bloomberg News and for the past four years for the New York Times. Kirkus gave her book high praise, saying its the best book on the fed in our time and a model of financial and Publishers Weekly called it a timely and insightful. On one of americas most powerful and least understood institutions. And we have a great discussion partner for gina this evening, another very experienced financial neil irwin who used to write for the New York Times and the washington post, and now as chief economic correspondent at axios. Hes also the author of two books, the alchemists the worlds key central bankers, who dealt with the Global Financial crisis a decade and a half ago. And to win in a winner all world. So ladies and please join me in welcoming gina smiley and neil irwin. Thanks so, brad. I keep looking around, see if any of the subjects of your book jay powell, Lael Brainard, janet yellen or the room, i think they all live not too far from here. I do not see any of them. So we can have a nice free conversation. They didnt agree. They didnt. They didnt show up. Maybe. Gina, its a wonderful book. Im going to start with the most basic question possible. Why should anyone give a flying flip about the Federal Reserve . Oh, good question. I think the actually the point of the book really is that everybody should care about the Federal Reserve that you know, i think we spent a long time and i think i spent a lot of my career sort of treating the fed as, the specialist interest. That is something that sort of the super nerds really care about and really understand that everybody else can kind of, you know, treat it as such that its something that a small segment of Society Needs to know about. But the fed has really expanded in power in such fundamental ways that. It really shapes our day to day lives. It sort of matters for democracy. Think in a way that wasnt previously true. That means that, you know, as informed citizens think, we all need to be paying attention to what its doing. So so the Global Financial crisis happened 15 years ago. I wrote a book about it that came out ten years ago. A lots happened since then. And part of what you do in this book is kind of us up to up to the moment. Tell us about the pandemic to just start there and and what was. Three years ago this month that that really had lasting consequences this institution. Yeah, well, you and i werent sleeping, so that was an important that was an important part of it. But no, i think i think is so interesting because i think when you wrote the alchemists on the financial crisis and when we doing this look back period on the 2008 crisis, we thought that was a once in a lifetime event. We thought that the things the fed did would never happen again. And instead, in march 2020, we found out that 2008 was a prelude to what ended up being a much more expansive, much more sweeping rescue of really entire Financial System. Everybody sort of forgets. I think it sort of fell by the wayside because there was just so much happening during that period. You know, we were all adjusting to life at home. Many people have lost their jobs. Everybodys stocks were crashing. And everything just seemed so sort of bad. And there was so much on with the pandemic that i think people missed that there was basically a financial crisis in march of 2020 and the fed came in with really all guns, all guns blazing and snuffed it out before it got so bad that. It became part of the fabric of. How we remember that period. They bought bonds in huge. They rolled out emergency facilities that saved markets that they had never saved before. And just really for two months, every they pretty much unveiled something that saved some corner of markets that some of which many had never even heard of before. And it was really this expanse of sort of just absolutely sweeping, all encompass rescue that i think, you know, really worked but also opened a lot of questions about what kind of power the fed. So group of people in a building down on constitution avenue there, hundreds of billions of dollars, trillions total to do different things. What are some of those things that really pushed boundaries now raise questions about what they might do in the future and how these authorities might be used down the road . I think maybe the most interesting one. So ill start there is the Municipal Liquidity that mlf opponents call it. You know, these arent arent named to be fun to talk about. But the was a really interesting one because and i talk about this at length in my book but because i found a year everything started going sideways with covid. We had a jay powell, the fed chair was testifying up on capitol hill and he got asked this question by rashida tlaib, who was at the time freshman in the house. And she last crisis all bailed out the banks. You did all these rescue programs for the banks next time what about detroit could you save a municipality . Could you offer some sort of cheap lending option that can help states and cities to through a tough patch. And he was basically like. Tldr no like we absolutely cannot do that. We dont want to do that. State and local government lending is just so political that the fed would never want to get into that. And i think what was really interesting is within a couple of weeks, the crisis starting in 2020, we saw them cross right over that line. Municipal had completely dried up. States and localities couldnt issue bonds because. The market just wasnt functioning. Somebody to do something to get it. To open back up. Theres a lot of pressure coming from congress to do something to get it to open back up. And the fed. The fed did it. They did. They a Municipal Liquidity facility and they really did they didnt actually end up lending to that many entities. They only lent to illinois and mta in new york. But the fact that they even offered it huge deal compared to what was previously thought possible. So so you write in the introduction that you do not. This is not a diatribe. This is not youre a ron paul in the fed. Thats not where youre coming from, but youre also not somebody who would reflexively defend them by a long shot. Explain kind of where youre coming at this from and what what your point of view is ultimately. Yeah, i was trying to come at it like a journalist you know, i was trying to not have super strong opinions about where this should all end up. But i do think that, you know, as a journalist, part of your role is to say, heres what society should be talking about. Heres where we havent really paid enough attention. Heres where we maybe arent shining enough of a light. And like i said, in 2020, there was just so going on that i think that all of this was pretty well covered in the but maybe we dont really remember happened. And i think we certainly havent really had a conversation about what happened, what kind of political pressures the fed came under, what kind of precedent all set out. And so i think that the of point of the book is hopefully that, you know, these things are worth talking. This is a period that a lot happened, a lot of precedents were laid out. And we should probably think about what those precedents mean. So lets dive into one thing i like about your book. Its its about its about economic policy. But it is driven by characters and lets talk about a few of them. Well start with the big guy. So, jay powell, Jerome Powell, who is he . Where did he come from . For people who only heard of him a few years ago when he became fed chair. Tell us about his background. He ended up in the position hes in. Yeah. So Jerome Powell is a local hes from this area. He grew up and grew up in georgetown or chevy chase, and he was the child of a fairly family in the area. They were catholic. He went to georgetown and he went to the same school that Brett Kavanaugh went to. Actually, he went private here. He went to georgetown afterwards. He went to princeton. Then he went to georgetown for law school lawyer, worked in sort of law for a little bit, but then kind of made the jump to finance. Spent a lot of his career in finance worked in private equity for a while and of flit in between the private and Public Sector for much of its career. So we saw him working at treasury sort of in the domestic finance arms. We saw him working at the fed a governor before he became chair and tell real quickly the story of how he ended becoming a fed governor, because that really wasnt anybodys radar until it. No, it wasnt it wasnt actually. And we this is this is one of the places where my book breaks a little bit of news, because he was actually early working on the bipartisan policy center. So he was working at a think tank for no money. It made a lot of money in private equity. It made a lot of money. Hes hes worth, i think, something in the realm of like 20 to 50 million. Its hard to tell at any because these government forms are reported. But so he had made a lot of money in the private sector, particularly in the private equity sphere. And he is decides that he wants to come back to washington, he wants to work in policy again. And so he decides to take a job at the bipartisan policy center. So hes working at the bbc. He really focused on one issue in particular, and thats the debt limit. Topical, obviously, given the current discussions. Debt limit. Hes really worried about the debt. Hes hes a pretty hes fairly conservative. Hes a registered republican. And is pretty conservative. Hes very worried the size of the national debt. But he also is very worried about the sort of the the showdown we have every couple of years over the debt ceiling breaching it. And we were for a debt ceiling debate this 20 yes. 2011 this is 2011. Hes worried about the debt and limit debate. And so he up basically wearing out the rugs, capitol hill going up and doing presentations on the date at, the time, which is the day that you cross the actual sort of limit and you like you really borrow any more and take the extraordinary measures dont work and youre past the point of being able to to solve the governments problems. And so he is giving these briefings and the government is not actually producing this number at this time. And so are using his number that he is producing in his briefings and hes talking to all these senators on capitol hill and hes just super effective people listening to him. Republicans are talking to him and he sort of ends up becoming this sort of weird emissary for the Obama Administration on capitol hill, which is funny because is a republican and he would not be the most expected member to become an emissary for the Obama Administration on capitol hill. And so the Obama Administration needs to nominate a fed governor. Theyve had a couple scrapped because couldnt pass the senate and they are looking around to find whos kind of centrist and who would fit that bill. And theyre like, why not jay powell know hes a republican. So the republicans will probably for him and hes just basically helped us out big time. On getting debt limit deal done. And so theyd send around letters, emails to each other, basically saying this is not qualified from an economic perspective, but we think that hes pretty you know, hes pretty smart and he did really did you know a lot help us here. Ive got some of that detail in my book and the end conclusion is that they ended up nominating jay powell to a governor role. He they were a little worried. He wasnt ph. D. Economist, but they were like, you lets go for it. And he got confirmed and, you know, rest is history. And so he spent several years as a fed governor. Theres seven of them under janet yellen. Donald trump gets elected. How does he end up in the in the big office . Yeah. And so, again, this is one of those instances. Hes just, you know, hes just kind of the sort of person whos been at the place at the right time. But i think hes also the kind of person who opens him up to himself, up to like joining the Bipartisan Policy Commission during the debate. Exactly kind of moment when when this kind of thing would happen. But hes sitting, hes out. Hes a governor hes been extremely helpful as a governor he kind of chaired every committee under janet yellen. You know, the the back story here is that fed governors absolutely detest chairing committees. Theyre like a ton of work. Theyre very thankless theyre not glamorous. Nobody gets any kudos externally for doing it. And jay powell did a lot of committee chairing. He did a lot of Committee Work while he was at the fed. He was a workhorse. He was a workhorse. People liked him internally. People liked him internally. He was very well liked. Youd like it would be a regular thing during this period that you would talk to somebody who had just left the fed and they would say like, that guy will sit. You and let you give him a briefing and ask you 96 questions and take careful notes. Then remember your name and your kids birthday, you know, like he was that kind of person. So people really liked him internally, he was in the right place in the right time. And he was a republican. And it was the Trump Administration. And so they wanted to pick somebody who was already at the fed who they thought would be confirmable. They wanted to pick somebody, president or secretary mnuchin, steve mnuchin, the trump treasury secretary had some comfort with. And jay powell was just in that position at that time. He was he was the clear candidate. So im guessing a lot of people in the room remember trump insults and attacking jay powell for raising Interest Rates too much. 2018 2019. How did you deal with that . How did he handle the the kind of intensity of the pressure that came from the white house during that time . Yeah. So it was interesting. It started out. It started out that trump liked jay powell. He was kind of recommended to him by people in his staff and he obviously got the job. But like a year we saw the chair powell kind of press forward with the feds campaign of raising Interest Rates. Trump absolutely freaked out at him on twitter, on tv shows everywhere. And interpol really just kind of ignored it. He didnt talk about it in public in any really any case that i can remember. He tried to bother them behind the scenes. Yeah, i mean it clearly did bother them behind the scenes actually. In fact i forward some emails ive freedom of information act requested some emails after what i think was im curious if you agree with this but i think probably the single worst attack that trump launched in jay powell was during g8 has most important speech of the year at, jackson hole, which is the feds big conference. Trump tweeted, whos the bigger enemy, jay powell or xi jinping checking out, which is obviously was not. And it was like while powell was speaking, was on stage when this happened. And so it was it was pretty like it was a crazy moment. Nobody paid any attention to anything that happened after that at the conference. It was kind of sad for the next panel. I think youre about to tell the story that his communications what did she email to. Yeah and so his vice chair Richard Clarida got an email from Communications Advisor michelle smith. She sent an email to everybody saying, hey fbi, this just happened and the vice chair just emailed back two words ug, hgh and so i think we did get some sense that they werent completely thrilled with how things going down, but they really worked hard not let that seep out too much. The moment it was obvious that they unhappy, but they really didnt think that if they showed sort any resistance or i think any sense of bowing it would be really bad fed independence. And theres this real belief that you need to be independent from the white house in order to set good policy. The Federal Reserve. So were going through the characters. Lael brainard in the news lately. Shes now joe, Top White House economic adviser. Whos Lael Brainard . Yeah, Lael Brainard is a super nerd, i think is the first and most important thing maybe to know about brainard. So she is she economist on how she was vice chair of the fed until very vice chair of the fed until very recently which is why shes relevant to this book. She was a sort of superstar professor at mit and decided to come down to washington and work in the work in the white house. And she ended up becoming president clintons sherpa, a negotiator in international issues. Shes been quite a bit of time at the treasury and ended up at the fed versus governor by the end of the book as vice chair. But she was really at the fed for a while before the in this book kicked off. And she had kind of by the time that 2020 rolled around taking on this very interesting role of the fed she was the l