Fed Credibility Crisis May Be Over, But Risks Remain

The credibility crisis of the Federal Reserve may be over, according to economist Robin J Brooks. Brooks made this statement in an August 8, 2026 video on his Substack channel.

In the video, Brooks discussed whether the Fed is losing credibility. He noted that Germany's economy has been struggling due to its membership in the Eurozone, which has led some to question the effectiveness of the European Central Bank (ECB).

Brooks suggested that the ECB may not be able to effectively respond to economic shocks, and this lack of confidence could lead to a credibility crisis for the Fed as well. However, he also noted that the Fed's actions, such as hiking interest rates, can have unintended consequences on other economies.