The David Lin Report Will Fed Cut Rates To 0%? Former Fed President On Next Move | Thomas Hoenig
Oct 29, 2025
In this engaging conversation, Thomas Hoenig, former President of the Kansas City Fed and current Distinguished Senior Fellow at the Mercatus Center, discusses the potential for the Fed to cut rates despite a strong economy. He analyzes regional banking risks, the influence of new Fed Chair candidates, and the relationship between AI investments and labor dynamics. Hoenig also delves into the complexities of stablecoins, warning about the pitfalls of risky reserve assets and the implications for consumers and the banking system.
AI Snips
Chapters
Transcript
Episode notes
Tighten Lending And Recheck Collateral
- Banks should tighten covenants and recheck collateral when lending booms.
- Supervisors must watch portfolio quality as the economy slows to avoid surprises.
Easing Spurs Search For Yield
- Lower Fed rates usually encourage lending and a search-for-yield that loosens standards.
- Monetary easing can thus indirectly raise bank risk-taking.
Tokenization vs Stablecoin Risks
- Tokenizing assets preserves ownership record but doesn't remove underlying market risk.
- Stablecoins backed by high-quality assets reduce credit risk but may still face market-value and liquidity risks.