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AXIOS (Neil Irwin) - Two words that worry global central bankers the most

Around the world, what were once solid lines dividing the responsibilities of those in charge of fiscal policy and monetary policy are being challenged or redrawn. The big picture: If elected governments succeed in undermining their central banks' independence — pressuring them to suppress interest rates or monetize debt to bail out yawning public debt problems — it foretells a world of higher inflation and economic volatility. - It was a challenge very much on the minds of the central bankers who assembled over the weekend in Jackson Hole, Wyoming, for the Kansas City Federal Reserve's annual symposium — and underscored by recent news. Zoom out: Central bankers' great fear is that we're entering a new era of "fiscal dominance," in…

AXIOS (Courtenay Brown) - Battles to shrink the Federal Reserve's balance sheet begin

Data: Federal Reserve; Chart: Neil Irwin/Axios Incoming Federal Reserve chief Kevin Warsh's ambition to shrink the central bank's multitrillion-dollar bond portfolio may quickly run into hard limits. Why it matters: For nearly two decades, the Fed's ability to flood markets with liquidity has been among its most powerful crisis-fighting weapons — and, in Warsh's view, too often a go-to tool for monetary stimulus outside of crises. - Now, the hot discussion among Fed officials and commentators is about how to responsibly shrink the Fed's asset portfolio — and whether that's even a worthwhile goal. The big picture: The Fed's assets ballooned from about $800 billion before the 2008 financial crisis to nearly $9 trillion at its 2022 peak…