The Fog of War

As we anticipated last week, the focus on the Fed usually transfixing Congressional hearings with the central bank’s chairman shifted to the grievous global geopolitical situation.  As Mr. Powell told HFSC and then Senate Banking, the Fed plays no official role in deciding whom the White House chooses to sanction and Members were too tactful to ask for a public description of the Fed’s formidable behind-the-scenes role on these critical decisions.  Even the discussion of whether the U.S. should have a CBDC was cloaked in how doing so might affect U.S. economic hegemony.  Still, Congress always has time for a political brawl and the fight that most directly involves the Fed is the one swirling around the Biden Administration’s nominees to join its Board of Governors.