Odd Lots · Podcast summary
Kansas City Fed President Jeffrey Schmid on the First Jackson Hole of the Warsh Era
Kansas City Fed President Jeffrey Schmid discusses the current economic landscape, the Fed's dual mandate, and the implications of financial innovation and AI on the economy and monetary policy.
Listen on the show ↗The digest
Kansas City Fed President Jeffrey Schmid joins Tracy Alloway and Joe Weisenthal on the "Odd Lots" podcast to discuss the current economic climate, the Federal Reserve's role, and the impact of technological advancements on monetary policy. The conversation takes place at the Jackson Hole Economic Symposium, a gathering of central bankers, finance ministers, academics, and financial market participants from around the world.
The Jackson Hole Symposium and Economic Uncertainty
Schmid highlights that this year marks the 49th anniversary of the Jackson Hole Symposium, with the 50th coming next year. The theme of this year's symposium is "Financial Innovation in Payments." However, this theme is set against a backdrop of general economic uncertainty and high bond yields. Alloway questions the connection between financial innovation and the current economic climate, particularly the high bond yields.
Schmid acknowledges the importance of the question, emphasizing that while payments might seem "boring," the Federal Reserve's ultimate goal is to make them so. He points out that the Fed moves 5 to 10 trillion dollars a day through various payment systems. The fascinating aspect, he explains, is the move towards "atomic settlement," where payments become instantaneous. This innovation eliminates the "float and fees" that have historically been associated with payments, representing a significant shift in how money moves. This instant and reconciled movement of money is a very innovative, yet potentially disruptive, development.
Keep reading in The Digest
The full 5-minute article, 6 more sections, and every new episode from Odd Lots and the creators you follow.
- The Dual Mandate: Duration and Liquidity
- The Impact of AI and Technology on the Economy
- The Labor Force and Structural Change
- Inflation and the Fed's Response
- The Fed's Communication and Reaction Function
- The Task Forces and Future Outlook
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