Pertinent Category: Sound Money Project

Financial Markets, Inflation, Monetary Policy

– March 4, 2023

“Although it may be difficult, the Fed must persevere. Elevated aggregate demand remains the best explanation for ongoing inflation. There is no reason for the Fed to ease its policy.” ~ Alexander William Salter

Inflation Surges in January

Government, Monetary Policy, Unemployment

– February 27, 2023

“How high rates will ultimately go depends on how inflation evolves over the next few months — and how quickly the Fed reacts to restore confidence in its longer term-inflation projections. The January PCEPI release marked a step in the wrong direction.” ~ William J. Luther

Joblessness and the Fed

Economic Education, Fiscal Policy, Government

– February 15, 2023

“Without a symmetric response to deviations from the target, the Fed’s so-called average inflation target will not produce 2 percent inflation on average. Instead, it will tend to produce inflation that exceeds 2 percent. That’s a far cry from price stability.” ~ Alexander William Salter

Is the Debt Ceiling Lunacy?

Currency, International, Monetary Policy

– February 8, 2023

“Unconstrained politicians are likely to authorize more borrowing than they should. The debt ceiling might provide a useful—if somewhat limited—constraint against excessive borrowing.” ~ William J. Luther

The Tragedy of the Monetary Commons

Bryan Cutsinger

– February 4, 2023

“While relatively well-functioning governments have managed to find mechanisms that mitigate the problem, it seems unlikely that Argentina and Brazil will be able to prevent a tragedy of the monetary commons given their history of money and fiscal mischief.” ~ Bryan Cutsinger

Supply Constraints and Inflation, Revisited

– February 3, 2023

“The Fed was late to realize nominal spending was surging and failed to correct course promptly when it realized it had made a mistake. Prices are higher today—and will remain permanently higher—as a consequence.” ~ William J. Luther

Government, Monetary Policy, Regulation

Efforts to Depoliticize the Fed Will Likely Make Matters Worse

Nicolás Cachanosky

– February 3, 2023

“These efforts to increase Congressional oversight are unlikely to depoliticize the Fed. Indeed, they are likely to make matters even worse.” ~ Nicolás Cachanosky

Should the Fed Stop Tightening?

– February 2, 2023

“The Fed should stay the course. Putting the nail in the inflationary coffin is more important than hyper-calibrating a ‘soft landing.’ But it likely won’t be long before we’re done.” ~ Alexander William Salter

The FOMC: To Pause or Not to Pause?

Gerald P. Dwyer

– February 2, 2023

“Given uncertainties surrounding the unusual stimulus and the lagged effects of monetary policy, it would be prudent to hold the Federal Funds rate constant for a few months and see how the economy responds to recent policy.” ~ Gerald P. Dwyer

Headline Inflation Falls, But Core Inflation Remains Elevated

– January 30, 2023

“At this point, it seems likely Fed officials will move forward with a 25 basis point hike. But how high they will push rates this year and how long they will keep rates high remain open questions.” ~ William J. Luther

FOMC Ratchets Up Inflation Projection

Economic Education, Inflation, Monetary Policy

– January 2, 2023

“FOMC member projections suggest that inflation will come down only gradually over the next two to three years and that the price level will remain permanently elevated.” ~ William J. Luther

Putting Aggregate Demand and Aggregate Supply to Work