Pertinent Category: Sound Money Project

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

Central Banking, Economic Education, Inflation, Monetary Policy

Bryan Cutsinger

– December 30, 2022

“Economists use aggregate demand and aggregate supply (AS-AD model) to understand how inflation and real income growth are jointly determined.” ~ Bryan Cutsinger & Alexander William Salter

Does Government Spending Lead to Inflation?

Bryan Cutsinger

– December 27, 2022

“The key point is that it is the central bank’s willingness to help finance government spending, not the spending itself, that drives inflation. In short: inflation remains a monetary phenomenon.” ~ Bryan Cutsinger

Central Banking, Financial Markets, Monetary Policy

Does the Fed Control Interest Rates?

Central Banking, Economic Education, Inflation, Monetary Policy

– December 26, 2022

“The Fed is a failed institution in need of major reforms. But we won’t make the right changes if we don’t understand the basic relationship between central banks and capital markets.” ~ Alexander William Salter

Supply, Demand, and Inflation: The Big Picture

– December 17, 2022

“Where did all this inflation come from? Supply-side issues are a problem, but in terms of magnitudes, it just doesn’t make sense to call them the chief contributor.” ~ Alexander William Salter

Fed Slows Pace of Rate Hikes

Authoritarianism, Central Banking, Government

– December 16, 2022

“The decision FOMC members make in February will depend on the inflation data released between now and then—and how Fed officials interpret that data.” ~ William J. Luther

CBDC in the USA: Not Now, Not Ever