Q&A: Matthew Rutherford, MPP'04 on His Career, the Economy, and How to Be a Successful Policymaker

Matthew Rutherford, MPP’04, is a partner at Bracebridge Capital, a Boston-based hedge fund. Fresh out of school in 2004, Rutherford embarked on an esteemed career in the public sector at the Federal Reserve Bank of New York and at the U.S. Department of the Treasury during the Obama administration — first as the Deputy Assistant Secretary for Federal Finance, then as Assistant Secretary for Financial Markets. The following is edited from a recent conversation with Rutherford about his career, his work in the White House, and the precarious state of the economy today.

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You were in the trenches during the financial collapse of 2008. At the time, did you realize you were right in the middle of a crucial moment in American history?

I knew it at the time. I knew this was highly consequential, and I was appreciating what was around me. My boss at the time, U.S. Treasury Secretary Timothy Geithner, said it was economic war. I saw people making really hard decisions; I was in awe of their ability to do that. There weren’t very many people in the Treasury Department in 2008-2009: it was right in the middle of the change in administration from President Bush to President Obama, so the building wasn’t staffed up. Let’s just say there was a lot of work to go around – and a lot of late nights. 

When the Obama administration gave way to the Trump administration, how did things change?

I have friends who are in civil service who were there for both administrations. But the federal government lost a lot of talent. Key positions weren’t staffed. That said, in 2020, the Treasury Department under Secretary Steven Mnuchin did a good job with COVID-19 and the CARES Act, an important piece of legislation that safeguarded a lot of people.

What are you most proud of in your career? 

The thing I’m most proud of in my government service is getting the opportunity to work in Washington during a consequential time, the financial crisis and the aftermath. There were so many important decisions being made every day, and I was lucky enough to be in the room. I had so much respect for the people I worked with in the Obama administration. I was surrounded by the A-team. 

I’m still in touch with a lot of those people, and they’re some of my closest friends. Geithner is an amazing leader – a really decent human I really look up to. Same with Jack Lew, who served as Treasury Secretary after Geithner, from 2013 to 2017. I learned so much from them and enjoyed my time there.

What did you learn?

The people I worked with in the Obama administration had a lot of integrity. I was surrounded by people who were trying to do the right thing, even when it was hard. The decisions being made—their degree of popularity with the average citizen wasn’t high. I also began to see how decisions are made – how to make them under pressure, under a lot of uncertainty, and how to do it when you have a number of cooks in the kitchen. 

Did you always envision a government job for yourself?

When I was at Harris, I only applied to government jobs. I don’t think I had a defined career path where I was striving to work at the Treasury or the White House. I just knew I wanted to be involved in consequential economic policy. I learned a lot about monetary policy at the NY Fed. 

What is the Treasury Markets Room that you helped establish and why is it important?

At the beginning of the financial crisis, the Treasury Department had no way to follow financial markets. I was working at the New York Fed at the time, and my boss, Bill Dudley, sent me to the Treasury to build a room that did that. It was a staff of about ten people. It’s still there to this day. 

What makes for a successful policymaker?

There are many ways to be a successful policymaker. Though it’s great to be the one generating the original concept of a policy, success also comes to the person who’s able to sit back, watch the debate unfold, then choose the best outcome given the constraints. That’s lost on some people. When you’re making a decision, you have to listen to other opinions. The people who are really good at this are the ones who are able to suck out the good ideas from a debate. You can have a really good career in Washington if you’re able to do that. 

Of course, you’ve got to be lucky enough to be in the seat where you’re noticed, and that seems to be the luck of the draw. But to even get your foot in the door, you have to be equipped with a high level of work ethic. And once you’re there, it’s important to get as many people’s opinions as possible.

How was your transition into the private sector?

I always wanted a broad career. I am proud of the fact that I have been able to transition over to the private sector where I have basically had a second career. It was a natural transition because I’ve always been involved in markets, but it’s also so different. There is lots of decision-making in managing a portfolio. It’s fast, and there’s feedback every day – you get a grade every single day. You’re not always going to get an A+, so you’ve got to check your ego at the door.  That was hard for me to get my head around at first. 

What are the greatest misconceptions about the market?

That it’s always perfectly efficient – because it’s not. Investors typically operate with a clearly defined mandate, such as following an index. This creates inefficiencies that can lead to arbitrage opportunities. This is my current job, finding those opportunities.

With the Treasury Department reaching its $31.4 trillion dollar borrowing limit, our government is currently embroiled in a debate about raising the debt ceiling, leading to a potential government showdown. Are we headed for another economic cataclysm?

I imagine we’re headed toward something like in 2011 and 2013: a big debate about Federal debt. It’s going to be a long year of debating. Remember in 2013 when Senator Ted Cruz (R-TX) got up and made an ungodly long speech and made a name for himself? Democrats say, “We’re not going to be held hostage,” but where inflation is, it may be hard for the Democrats to hold firm. I see it as a faceoff for a long time and as we get closer there will be an agreement.

How did Harris prepare you for your career?

Professor Don Coursey taught economics, and he taught me a lot. He encouraged me to take advantage of taking courses across the school. I took classes at the business school as well. There were so many opportunities and lectures. The University of Chicago was my first start-to-finish intellectually stimulating experience. And from a public policy perspective, Harris taught me that it’s all about learning the pros and cons of a given topic. One thing I learned in Washington is there’s a lot of debate. We did a lot of that at UChicago. That was just one of the debating muscles we flexed while we were there.