Hughes discusses his recent book Marketcrafters, and how markets are deliberately built with outcomes that can serve the public good – or not. He uses this lens to unpack today’s economic flashpoints, from the Fed to crypto to climate.

Chris Hughes knows a thing or two about power and influence. He helped launch Facebook from a Harvard dorm room and watched it morph into one of the most influential – and, in his view, dangerously unchecked forces on the planet. Over the past decade, he has examined the underlying architecture of the American economy: how it operates, whose interests it serves, and how we might reimagine it to deliver broader prosperity.

In his recent book, Marketcrafters: The 100 Year Struggle to Shape the American Economy, Hughes explores a deceptively simple idea: markets don’t just appear out of thin air.

Whether we’re talking about cars, energy, housing, or healthcare, markets are designed. They’re built, shaped -- and sometimes warped -- by real people making real decisions. Behind the scenes, central bankers, regulators, elected officials, lobbyists, and technocrats are constantly crafting the rules, incentives, and frameworks that guide economic activity and steer the flow of money and power.

Hughes calls them “marketcrafters,” and their choices -- often invisible to the public --are key to understanding how the economy works, and why it sometimes doesn’t. At their best, they can drive innovation, stability, and shared prosperity. But when they get it wrong, they can generate stagnation, inequality, and crisis.

This lens feels especially urgent right now. With mounting political pressure on the Federal Reserve, the explosive rise of crypto, and growing concerns about a second Trump administration bent on reshaping economic governance, the stakes of marketcraft have never been clearer. In a wide-ranging conversation with the Institute for New Economic Thinking (INET), Hughes unpacks what’s at risk, from efforts to stack the Fed with loyalists and the rise of stablecoins, to the need for coherent marketcraft on climate and natural resources.

His message is clear: markets may look like forces of nature. But they’re not. They’re made -- and we’d better be paying attention to who’s making them, and for whom.

Lynn Parramore: With the Federal Reserve facing a crisis of intense political pressure and challenges to its independence, can you take a step back and talk about who the Fed is truly meant to serve and what its primary purpose is?

Chris Hughes: The Fed has been founded and re-founded at least three times, in 1913, 1935, and 1951, so it’s difficult to point to any one moment in its political history to answer that question. In reality, like other political institutions, it’s always reinventing itself and adapting for the moments we live in. Obviously, we know its legal mandate is price stability, maximum employment, and ensuring moderate long-term interest rates.

The Fed has also read its mandate to include financial stability and the prevention of systemic risk. And it has come to recognize that it sometimes plays a global role, not just a domestic one. That’s a lot of different missions for one institution to be pursuing at any one moment.

So your question of who's it for -- I think it is for all of us, all Americans. Those goals of maximum employment and price stability are things that every American can, does, and should benefit from. It's also true that its methods of delivering that have particular attention to finance and banking.

There are ways to deliver on price stability and maximum employment that involve Congress, that involve fiscal solutions. The folks at INET have discussed everything from tax policy to job guarantees and other ideas that are out there. The Fed believes that through its management of monetary policy and the regulatory structure for banks and finance, that it can help deliver on those top-line goals.

The Fed is meant to serve all of us, but its methods to achieve those goals tend to disproportionately affect banking and finance. I think often it has been in a position where it’s supporting the institutions of banking and finance, particularly in crises. Sometimes it's been appropriate, sometimes it's gone too far.

In some moments, the Fed’s regulatory and supervisory roles hold financial institutions to certain standards -- and that should happen in both good times and bad. It often does this well, though mistakes still occur.

So this is a very broad answer, because I think the Fed as an institution is extremely important macroeconomically, which means it's important to everybody, but particularly to finance and banking folks.

LP: You’ve written about pioneers like Andrew Brimmer, the first Black Fed governor, and Nancy Teeters, the first female governor, who brought fresh perspectives to the Fed -- often as dissenters. How do you see the current attack on Governor Lisa Cook fitting into the bigger picture of representation and decision-making at the Fed? And what do you think this challenge means for the Fed’s independence and its ability to serve the broader public?

CH: There’s a lot in that question. The attempt to remove a governor from the Board, as you know, is unprecedented. There have certainly been serious efforts over time to influence -- or even bully -- the institution, but this is next-level. I think it’s part and parcel of a broader strategy by the president, not just to influence the Fed, but to make it kneel before him. It’s part of a vision, Trump’s vision, of the entire federal government as something that should be under direct command and control from the office of the president, where he can make decisions that even Congress says he cannot.

Congress makes it clear that members of the Board of Governors can only be removed for cause, and this is a pretty thin pretext. Historically, removal has required something far more serious to meet that standard.

LP: The move seems thuggish, one might say.

CH: Yes, I think that’s the right term. As an institution, we’re all watching closely to see just how strong its insulation really is. Most central bankers, going back to the Fed’s beginnings, have believed that the ability to make decisions independent of the political cycle is a virtue.

At the same time, Congress designed the Fed to remain responsive to the political system. The president can nominate members of the Board of Governors, including the chair, but they have to be confirmed by the Senate. So there’s democratic accountability built in.

Still, they serve 14-year terms for a reason, and can only be removed for cause, for a reason. That’s because sometimes we need the central bank to do unpopular things, like raising the cost of credit -- even if that makes mortgages more expensive -- in order to maintain price stability.

And we want the Fed to step in at times to ensure the orderly liquidation of major banks -- and sometimes even non-bank financial institutions. Because when something blows up in the middle of the financial system, it can trigger much bigger problems. Of course, the goal is to do the work ahead of time to prevent that risk in the first place.

But when intervention is needed, we want the Fed to help these firms unwind in an orderly way, not just collapse, like Lehman did. That kind of action is often unpopular, but it’s necessary. And I think one reason the Fed has been largely successful over time is because it’s insulated from the ups and downs of the political cycle.

I believe that insulation is really important to preserve. The question is: how resilient will it be? There are some extreme scenarios being discussed where Trump is able to get a majority on the Board of Governors, with that particular majority then moving to dismiss the Reserve Bank presidents. People are talking about it. I think it's quite unlikely, but it’s evidence of a strategy on the part of this White House to dismantle what's helped the Fed play such an important role for so many decades.

LP: You’ve written about marketcrafting as something that, at its best, serves the public good. If Trump is trying to stack the Fed with loyalists and demand loyalty from its governors, who is the Fed really representing at that point? Maybe one way into that question is crypto. Trump has shown interest in it, and some are wondering: could gaining control over the Fed be part of a broader effort to shape emerging markets like crypto in ways that benefit wealthy investors, rather than the broader public? Do you see a risk in that sort of marketcrafting?

CH: People are always asking me if Trump is a marketcrafter, and my consistent answer is that for the most part, he's not. Because that requires a plan, and it requires consistency.

What we're seeing is economic policy by whim, for the most part. You can see it in the t