Pertinent Category: Sound Money Project

The Sound Money Project was founded in January 2009 to conduct research and promote awareness about monetary stability and financial privacy. The project is comprised of leading academics and practitioners in money, banking, and macroeconomics. It offers regular commentary and in-depth analysis on monetary policy, alternative monetary systems, financial markets regulation, cryptocurrencies, and the history of monetary and macroeconomic thought. For the latest on sound money issues, subscribe to our working paper series and follow along on Twitter or Facebook.

Advisory Board: Steve H. Hanke, Jerry L. Jordan, Lawrence H. White
Director: William J. Luther
Senior Fellows: Nicolás Cachanosky, Gerald P. DwyerJoshua R. Hendrickson, Thomas L. Hogan, Gerald P. O’Driscoll, Jr., Alexander W. Salter
Fellows: J.P. Koning

More Interest Rate Hikes Ahead

– March 6, 2023

“Fed officials will likely continue tightening, and to a greater extent than previously projected. Their overreaction will not undo the damage of acting too late. It will make matters worse.” ~ Nicolás Cachanosky

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Persistently Pesky Price Pressures

– 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

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Inflation Surges in January

– 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

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Joblessness and the Fed

– 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

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Is the Debt Ceiling Lunacy?

– 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

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The Tragedy of the Monetary Commons

– 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

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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

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Efforts to Depoliticize the Fed Will Likely Make Matters Worse

– 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

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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

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The FOMC: To Pause or Not to Pause?

– 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

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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

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FOMC Ratchets Up Inflation Projection

– 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

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