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The All-In Podcast
Chamath: “What does the Fed actually do in 2025?”

Chamath lays out the Fed’s four core responsibilities, and if they should continue doing them in 2025:

– Lender of Last Resort ❌
– Monetary Policy ❌
– Banking Regulations ✅
– Clearinghouse ✅

“We have an extremely vibrant, and complicated, and interconnected $130T global economy.”

“It's moving at the speed of light.”

“The Fed gets together once a month, tries to divine what monetary policy, what the money supply should look like, based on data that is often incorrect.”

“We see that in the BLS data, we see that in the GDP prints, we see it in all of the inputs.”

“So I think the real question is, there are certain parts of what the Fed does that they can continue to do, and I think everybody would probably say it's an okay thing.”

“Could they be a lender of last resort? Personally, in my opinion, no.” ❌

“I think that Treasury does a better job, and I think that Treasury has a better mechanism to get the American taxpayer a win than the Fed does.”

“Do they actually create monetary policy and price stability? I would say that the capital markets and the free markets actually do a better job of that.” ❌

“They define much more what the spread is. I think SOFR is a much better rate mechanism than the Fed funds rate at this point.”

“Do they do banking supervision and regulation? Yeah, they probably do a reasonably good job of that.” ✅

“Do they do a good job as a payment system and a clearinghouse? Again, probably something that's pretty uncontroversial that they could continue to do.” ✅

“The bigger picture is the two things that are the most dynamic, they are the worst at doing.”

“And so I would actually question whether that responsibility should sit with a handful of humans looking at faulty month-old data.”
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