Topic: Central Banking

Politicizing Monetary Policy Won’t Fix the Fed’s Failings

– June 10, 2024

“Even if one thinks Trump is well-suited to make interest rate decisions (and there is little reason to think he is), it does not follow that Trump’s proposed solution would improve monetary policy.” ~Nicolás Cachanosky


Inflation Continued to Decline in April

– June 1, 2024

“While inflation is declining once more, members of the Federal Open Market Committee (FOMC) have suggested rates would need to remain high for longer than they had previously projected.” ~William J. Luther


Why Does the Federal Government Borrow? 

– May 30, 2024

“Policymakers have an incentive to finance spending with money printing and debt to hide the cost of spending from taxpayers. These costs cannot be hidden forever, though.” ~Thomas Savidge


The Demise of the Dual Banking System 

– May 22, 2024

“The issue comes down to whether a state-chartered bank that fulfills the legal requirements for a master account can be denied one by the Federal Reserve.” ~Gerald P. Dwyer


Is The Fed Manipulating the Market?

– May 15, 2024

“We cannot just look at the Fed’s target rate to determine whether it is manipulating the market. We must consider its target rate relative to the natural rate.” ~Bryan Cutsinger


Chairman Powell and The Fed’s Limits

– May 9, 2024

“Congress should applaud Chairman Powell’s candor on uncertainty and strongly support his principle of operating the Fed within the limits of its mandate.” ~Alex J. Pollock


Inflation Declined in March, But Remains High

– April 26, 2024

“Market participants continue to expect the Fed will cut its federal funds rate target this year — just not anytime soon.” ~ William J. Luther


A Better Model Won’t Fix The Fed

– April 23, 2024

“The whole point of expectations-responsive monetary policy is to remove the discretionary and technocratic elements from central banking. Disappointingly but unsurprisingly, the Fed is doing the opposite: doubling down on discretion and technocracy.” ~Alexander W. Salter


Inflation We Can Feel But Don’t Measure

– April 16, 2024

“Regardless of whether one thinks that the CPI should include interest rates and/or asset prices, it seems clear that consumers factor in these costs when evaluating the cost of living.” ~Joshua R. Hendrickson


‘Shock Values’: An Idiosyncratic Economic History

– April 15, 2024

“While it provides a concise accounting of the many efforts taken to address inflation and deflation over the history of the republic, there is a cost to recounting such a rich history in so few pages.” ~Paul H. Kupiec


Fixing A Big Mistake in Risk-Based Capital Rules

– March 27, 2024

“Both long Treasuries and mortgage-backed securities guaranteed by government agencies are in current regulation included as ‘High Quality Liquid Assets.’ But of course they both can and have created plenty of interest rate risk.” ~Alex J. Pollock


“The Price of Time” and Broken Central Banking

– March 26, 2024

“The unique value of Chancellor’s book, beyond tracing this intellectual history of interest and illustrating it by financial debacles up and down the centuries, is to connect the social and market outcomes with the broken money markets.” ~Joakim Book