“Now, that’s an argument you wouldn’t think was possible, that goes to the velocity of money. When you put so much of it in so few hands, do they really have the ability to move it effectively? Last year, they did,” Farr said.

At the same time, many lower- and middle-income households lived paycheck to paycheck while combating inflation. In an economy with concentrated growth, Farr warned the expansion may be more fragile than one supported by broad-based demand.   

The risk is fiscal, not monetary

Harker addressed a fiscal policy issue that’s often misunderstood: the Federal Reserve is not the sole driver of the economy. 

He reviewed what the Fed can do — influence financial conditions, cushion downturns and fight inflation — and what it cannot do: fix structural issues like housing shortages and supply chain constraints.

“Monetary policy cannot substitute for a coherent, sensible fiscal policy strategy,” Harker said. “The federal government ran a deficit of $1.8 trillion in fiscal year 2025. That’s a crisis-level deficit in what should be a stable period.”

He warned the federal debt now equals the size of the U.S. economy, with net interest payments crossing $1 trillion last year.

Reinforcing Harker’s point, Farr argued that even after the Fed lowered short-term rates, long-term borrowing costs remained elevated, with roughly a 220-basis-point spread between the federal funds rate and the 10-year Treasury yield. Farr suggested this was an indicator of “fiscal dominance,” when rising government debt limits the effectiveness of monetary policy.

While the pandemic response was necessary, Farr stated Americans are now reaping the long-term consequences as debt crowds out productive investments in infrastructure, research and education.

Referring to projections in the Penn-Wharton budget model, Harker mentioned sensible reforms are possible, but they’ll require action beyond the Fed’s control. 

“What we lack is not economic insight, it’s political follow-through,” Harker said. “The Fed can do its job, but it cannot do everybody else’s.” 

Incentives as economic drivers

On the subject of political accountability, Vittert explored the unprecedented ways political forces are shaping the economy.

“The reason for everything that's happening in Washington — the division, partisanship, paralysis or complete absence of leadership — is not because of politics and political views. It's because of money,” said Vittert, suggesting Washington is powered by politicians and the media.

According to Vittert, policymakers in Congress and media members are making decisions in their own best interests, not America’s. Politicians optimize for reelection by appearing on the news, sharing extreme positions and avoiding compromise with the other side. When outrageous soundbites lead to more fundraising, there’s no incentive for politicians to solve America’s problems.

The media, long tasked with holding politicians accountable through balanced reporting, are instead monetizing the demand for narrowcasting, where content is tailored to audiences whose views it reinforces rather than challenges. 

“When outrage dominates content, emotions become economic drivers and the division between political parties grows wider,” Vittert said.

To assuage uncertainty, Vittert referred to his experience as a war correspondent, claiming countries collapsed not from division, but from the profit of war.  

“America’s version of that war is not fought with bullets, missiles or bombs,” Vittert said. “It’s fought with cable news hits and politicians' fundraising emails. 

“If there is an answer to all of this, it will not come from Washington,” he added. “It’s going to come from people who understand economic incentives, and who understand how to change [them].”