Why Central Banks Can No Longer Control Money Supply

Monetary Policy Explained with Fexingo: Central Banks, Money Supply, and Interest Rates · Sep 25, 2026 · 7m · transcript

In this episode, Lucas and Luna dissect the structural shift in modern monetary policy where central banks have lost direct control over the money supply. Rather than setting rates to manage liquidity, institutions like the Federal Reserve now rely on administered interest on reserves and reverse repos to steer short-term funding costs. We explore why the traditional money multiplier has broken down, how excess reserves became a feature rather than a bug, and what this means for inflation dynamics and economic forecasting in September 2026.

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