""This Fed went to sleep," El-Erian, president of Queens College at the University of Cambridge, told CNBC. He said the independent central bank needs to admit it made some mistakes: It needs to think about scenario analysis as opposed to point estimates, it needs to look more closely at supply-side economics, and it needs to improve its culture of compliance."
"El-Erian said Bessent's estimation of the future of the Fed is "perfect," adding: "We don't need a play-by-play Fed, we need the Fed to cool it. We need the Fed to step back and take a bigger, visionary view, and we need reforms. We desperately need reforms, and I think all five on the shortlist are committed to reforming that insitution, which is critical not just for the U.S. but for the global economy.""
The Federal Reserve requires urgent institutional reform and a broader, visionary approach to policy. The central bank must acknowledge past mistakes, adopt scenario analysis instead of relying solely on point estimates, examine supply-side economic factors more closely, and strengthen its culture of compliance. The Fed should reduce play-by-play guidance, cool short-term intervention, and focus on long-term structural strategy. A shortlist of five reform-oriented candidates is under consideration, reportedly including the so-called "two Kevins"—Kevin Hassett and Kevin Warsh—as well as Federal Open Market Committee members such as Chris Waller and Michelle. The White House has confirmed a nominee decision.
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