Last year I added cryptocurrencies and private credit to the coverage. What should I add this Fall?
The erosion of exorbitant privilege:
Insurance non-renewals due to climate change, from NYT:
as costs from climate change rise:
Source: ClimateCentral accessed 8/17/2026. (Note: This data used to be provided by the US government pre-Trump 2.0).
Asset bubble or boom?
Source: Shiller.
On Topic!!! – Here’s a financial risk that may need attention: September is the month when monetary policy folks flock to Jackson Hole. This year, the term “Treasury-Fed Accord” is showing up in Fed watchers’ previews of the event:
https://substack.com/home/post/p-211567960
https://www.brookings.edu/articles/what-is-the-treasury-fed-accord-of-1951-and-why-is-it-important/
The 1951 Accord announced that the Fed’s WWII-era policy of controlling borrowing rates across the curve, the Agreement on Comprehensive Financing Program, was transitioning to an end. Among Fed Chair(man) Warsh’s several ideas for changes at the Fed is that “…if we have a new accord, then the Fed chair and the Treasury secretary can describe to markets plainly and with deliberation, ‘This is our objective for the size of the Fed’s balance sheet.’”
In other words, the Fed would decide jointly with Treasury the size and composition of the Fed’s balance sheet, rather than the Fed deciding on its own. The 1951 Accord announced a switch toward greater independence for the Fed. What Warsh describes is a shift away from Fed independence, but in typical slippery style, he conflates the two. He has couched his idea in terms of reining in the Fed, but it would be the Treasury Secretary – who works for the President – who would do the reigning. Currently, Congress has oversight of the Fed; under a new Treasury-Fed Accord, it would be the President. Warsh seems to think that a task force he has created can undo what Congress has wrought – a common notion among felon-in-chief appointees.
Here’s an earlier call for a modern Accord, penned by a guy with a better claim to understanding the issues than Warsh has:
https://www.richmondfed.org/publications/research/goodfriend/plosser
Among the principles Plosser lays out are that the Fed only ever purchase Treasury securities, with the Treasury taking over bailout tasks. Plosser would also require that Treasury go to Congress for purchase authority each time a bailout is to be undertaken; notice how this keeps authority with Congress, not Treasury. Treasury executes, perhaps with Fed assistance, but Congress authorizes. This is in recognition that bailouts are fiscal policy; under the Contitution, Congress is in charge of fiscal policy.
Warsh may not want to discuss his Treasury-Fed Accord idea at Jackson Hole. Sahm and Wessel, in raising the issue, are surely doing more than expressing curiosity; they’re trying to force his hand. They want the buzz at Jackson Hole to be about whether the new guy at the Fed is a pawn of the felon-in-chief, whether he’s an empty suit, or can grow into his job. We should hope they succeed.
When someone has a hidden agenda – wanting to do something for reasons they do not want to reveal – they come forth with an acceptable justification (while keeping their real justification undisclosed). The Trump administration is extremely bad at most things including making up “acceptable” justifications.
“if we have a new accord, then the Fed chair and the Treasury secretary can describe to markets plainly and with deliberation, ‘This is our objective for the size of the Fed’s balance sheet.’”
There is nothing currently preventing the Fed and the Treasury secretary from revealing their objectives. Its pretty clear that Trump want the ability to take control of treasury rates . They know that what they are and are planning to do would likely wake up the bond market monster – before they do it they have to give the “king of bankruptcy” weapons to fight that monster.
The end of oversight and accountability.
How an overabundance of bond sales (oversupply of bonds) effects rates.
This was some food for thought (not necessarily related to class syllabus). It is of course the major topic right now.
https://finance.yahoo.com/economy/policy/articles/top-economist-trump-deadly-cocktail-070000763.html