CIO Ritholtz Says Real FOMC Regime Change Is Fiscal, Not Fed Leadership
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May 1: Barry Ritholtz says replacing Jerome Powell with Kevin Warsh would have limited effect; he argues fiscal policy now matters more than Fed leadership in the FOMC debate, shifting the regime from monetary to fiscal dominance. - He notes post‑2008 Fed tools boosted capital markets but did not push PCE inflation above 2%, while pandemic fiscal stimulus drove inflation to 9% and reshaped policy limits — implications for crypto, DeFi, CEX/DEX liquidity, token demand, inflation hedging and market volatility.
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- Ritholtz says fiscal policy now matters more than Fed leadership in the FOMC debate.
- Post-2008 Fed tools lifted capital markets but failed to push PCE inflation above 2%.
- Pandemic fiscal stimulus helped drive inflation to 9% and reshaped Fed policy limits.
Co-Founder, Chairman, and CIO of Ritholz Wealth Management LLC, Barry L. Ritholtz, has framed the current Federal Reserve debate around a larger policy shift. He argues that leadership changes at the FOMC matter less than the economy’s move from monetary dominance to fiscal dominance.
In his May 1 commentary, Ritholtz said replacing Jerome Powell with Kevin Warsh would have limited impact on inflation or broader economic conditions. His central point was that government spending now carries more economic force than interest-rate policy.
Fiscal Policy Takes the Lead
Per the report, Ritholtz contrasted the …
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