The Federal Open Market Committee, the rate-setting body at our central bank, recently convened with Kevin Warsh as the new Chairman. He takes the helm as U.S. inflation is running between 3-to-4% and Washington is running annual deficits just shy of $2 trillion. Abroad, the Fed has become something akin to the world’s lender of last resort, offering emergency dollar liquidity to foreign central banks. The demands, at home and abroad, raise questions about Fed independence, a principle promoted by both Warsh and his former colleague – and our guest on today – Thomas Hoenig, who has long argued that the Fed has drifted from a guardian of price stability into a provider of liquidity for both Washington and the global financial system.

We  focus on the stakes in whether the ‘New Fed’ will find a way to resist the pressure of recent years to open the taps and instead, to establish more independence. For businesses, the outcome of this challenge will determine bond yields, the costs of capital and how much we all pay in interest. So we ask: What does the new Fed mean for business?

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