On the Media Trump's War On the Fed [EXTENDED VERSION]
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Jan 21, 2026 
In this insightful discussion, Mark Blyth, a Professor of International Economics and Public Affairs at Brown University, dives into the pressing investigation into Fed Chair Jerome Powell. He explores the risks of politicizing the Federal Reserve, explaining how it could threaten its independence and lead to undesirable rate manipulation. Blyth highlights central banks' evolving authority post-2008, using Turkey as a cautionary tale. He urges listeners to focus on real economic pressures like supply chains instead of sensational headlines about the Fed.
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Fed Controls Short End, Not Whole Curve
- Central banks mainly control short-term interest rates but lack full control of long-term rates set by the bond market.
- Long-term borrowing costs depend on global buyers' confidence, not just Fed actions.
Commercial Banks Create Most Money
- Most money in circulation is created by commercial bank lending, not directly by central banks.
- Banks create money when they issue loans and destroy it when loans are repaid.
Buying A Motorcycle Creates Money
- Mark Blyth uses buying a Ducati as an example to show how bank loans create money.
- The bank hands you money to buy the bike and that act creates the money supply.