- "The Big Short" investor Michael Burry thinks the Fed is an unneeded institution.
- Trump exerting more control could mean the end of the Fed, he speculated.
- The famed short-seller said he thinks another department could handle the Fed's job.
Michael Burry has a new hot take: the US doesn't need the Fed.
That's because the US central bank has "the easiest job in the world", according to "The Big Short" investor, who aired more of his contrarian views in a chat with Michael Lewis on Tuesday.
When asked by Lewis what he thought of Fed independence, Burry said he had "a sick view" on the matter, adding that the end of the central bank could come when Trump decides to exert more control.
But, Burry, who has built a cult following among investors for his contrarian and frequently anti-institutional views, wasn't bothered by that prospect, and he said that he believes the Fed has caused a lot of damage over the last century.
"I have kind of a sick view on this," Burry said, speaking on Lewis' "Against the Rules: The Big Short Companion" podcast. "I think that when Trump starts running the Fed, it might become the end of the Fed. Because if he's running the Fed, then everybody's going to hate it, not just me. So we'll see."
He pointed to how the central bank was poised to ease rates at its December policy meeting, though there are signs that inflationary pressures in the economy are creeping up again.
Dropping interest rates could "kill" savers and fixed-income investors in the economy, Burry said.
"We don't need it," he added of the central bank. "Like, why are they gonna drop rates? There's no reason to drop rates now."
Burry said he believes monetary policy could be guided by the Treasury Department. He compared their current roles and suggested they could be largely interchangeable.
"I mean, they're almost the same department already.
While the Fed sets short-term interest rates and is a buyer of government debt, the Treasury issues bonds that fund the government.
"I think the Fed doesn't do anything very helpful. I think it's the easiest job in the world," Burry said.
The investor, who rose to fame shorting the US housing market ahead of the 2008 crash, has been unusually vocal in recent weeks as he's emerged from a yearslong hiatus on social media. Since returning to the spotlight, Burry has sounded multiple alarms about a stock bubble, unveiled fresh bets against Nvidia and Palantir, and launched a new Substack newsletter.
The post 'The easiest job in the world': 'Big Short' investor Michael Burry explains why the Fed shouldn't exist, and what should replace it appeared first on Business Insider