Former White House advisor Gary Cohn: 'The Fed has lost control'
Per Business Insider
The former White House advisor, Gary Cohn, has shared his thoughts on the Federal Reserve, saying it has "lost control." This was within a statement where Cohn, the now director of the National Economic Council, said that Cohn actually outsourced monetary policy.
This came as the advisor said that the Feds had decided to focus its task on the banking sector from "slowing the economy." Cohn gave a statement to CNBC saying the Feds were outsourcing its monetary policy.
Cohn: "He's outsourcing it by saying, 'look ... what I see on deposits leaving these banks, I don't believe they are going to loan money, or as much money, and therefore we're going to see a natural contraction in the economy.'"
The former White House advisor said financial tightening would mean a rate hike of 25 basis points. It was noted that the economy was slowed down by the Fed and US banks as lenders didn't have excess deposits that they could give on-demand to buyers.
Cohn: "I think it's getting harder. Now that the Fed has lost control, it is more difficult,"
The National Economic Council director said that a recession is more possible and that avoiding one is now more difficult. He noted that previously, the Fed had more of a chance for a soft landing.
Cohn: "My view is they want to stay here as long as they can... The worst mistake they can make is to cut and then have to raise again."
Recently, Jeremy Siegel said in a Fortune opinion piece that the "Fed shrapnel" was behind the collapse of Silicon Valley Bank. It was mentioned that the economy could be sent into a recession.
After previously making a distinction of which banks could receive the Fed's "treatment," Yellen then said that the US Treasury would be ready to take "additional action if warranted" to stabilize banks.
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Other News:
- Jeremy Siegel: 'Fed shrapnel killed this bank and may send the economy into recession in the process'
- Yellen says the US Treasury is ready to take ‘additional actions if warranted’ to stabilize banks, changing her comments from yesterday
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