'I Just Don't Want the Fed to Mess Things Up,' Says Potential Fed Nominee Judy Shelton

The transcript discusses the role of the Federal Reserve in economic policy, debating whether it should take a more activist approach. Concerns are raised about the Fed's interventionist policies, particularly the manipulation of interest rates and the practice of paying interest on excess reserves. These actions are seen as potentially distorting the economy, affecting private sector entrepreneurship, and providing banks with incentives that may not align with broader economic goals.

What is the potential risk of having a more activist Federal Reserve?

• It would increase government revenue.

• It might undermine the progress being made.

• It could lead to economic stability.

• It could enhance private sector growth.

What is one criticism of the Federal Reserve's interventionist approach?

• It increases the savings rate among citizens.

• It creates distortions by artificially moving interest rates.

• It reduces the interest rates for ordinary Americans.

• It encourages banks to make more consumer loans.

How does the Federal Reserve's practice of paying interest on excess reserves affect banks?

• It increases competition among banks.

• It forces banks to lower interest rates for depositors.

• It provides banks with a risk-free income source.

• It encourages banks to lend more to entrepreneurs.

What is the suggested approach towards the Federal Reserve's current practices?

• To increase intervention in the private sector.

• To abruptly change all policies.

• To maintain the status quo.

• To gradually move away from current distortions.

What impact do the Federal Reserve's practices have on private sector entrepreneurship?

• They increase the number of consumer loans.

• They discourage traditional financial mediation.

• They provide more funding opportunities.

• They encourage more entrepreneurial ventures.