“Perhaps the Fed’s move to average inflation targeting won’t make much of a difference. But it nonetheless risks further politicizing the Fed. To the extent that it means the Fed will engage in even more credit allocation and Congress will take a more active role in guiding those credit allocation discussions, there is cause for concern.” ~ Nicolás Cachanosky
READ MOREWhat’s extraordinary to consider is how the principles she presents here apply equally to economics, sociology, history, and political theory. Gupta writes here like the F.A. Hayek of epidemiology. But the topic of the day is public health and here are her extraordinary observations, ending in a grave warning.
READ MORE“At the present juncture, developed country government bond yields are more likely to fall than rise. Fiscal spending will be financed by deferred taxation, the repayment of today’s (and probably tomorrow’s) obligations will be bequeathed to our children and grandchildren. Digital taxes, taxation on wealth and financial transaction fees may creep higher at the margins, along with higher taxes on higher earners, but debt is the least painful solution to the fiscal needs of the present.” ~ Colin Lloyd
READ MORE“A lack of concern for fiscal discipline by both the U.S. Treasury Secretary and a call for persistent, near zero rates by the Chairman of the Federal Reserve suggests that the Federal Reserve and the U.S. Treasury will act in concert to make the new inflation target a reality. It is not a question of whether the inflation rate will pass 2 percent, but when.” ~ James L. Caton
READ MORE“If it’s serious about a 2% inflation target, the Fed will have to do better than a pep rally. We were promised meaningful change; what we got was the same old song and dance.” ~ Phillip W. Magness & Alexander W. Salter
READ MORE“It’s hard to see the Fed achieving higher inflation, given its recent failure in this matter. A quick look at the monthly consumer price index data over the last decade shows that for the vast majority of the period, inflation was well below 2%. Or put another way, despite all the money printing by the Fed and extended periods of low interest rates, the Fed hasn’t hit its targets in any sustainable way.” ~ Simon Constable
READ MORE“If credible and clearly articulated, an average inflation targeting regime would provide a better anchor for inflation expectations than a period-by-period inflation targeting regime. Alas, the Fed’s new policy strategy has not been clearly articulated, leaving short-run inflation expectations unanchored.” ~ William J. Luther
READ MORE“The Federal Reserve has increased its commitment to offset a fall in the total level of expenditures in response to an economic downturn. Absent a systematic disruption in the structure of international monetary arrangements or another factor that cannot be offset by monetary policy, the FOMC will ensure that downturns are met with accommodation from monetary policy.” ~ James L. Caton
READ MORE“The crisis period is now behind us. The need for these facilities, if ever there was one, is now past. It’s time to put away the emergency lending tools.” ~ Thomas L. Hogan
READ MORE“A mystery for months is how it is that so many governments in so many different places on earth could have adopted the same or very similar preposterous policies, no matter the threat level of the virus, and without firm evidence that interventions had any hope of being effective.” ~ Jeffrey Tucker
READ MORE“If the Fed aims to reduce inequality, it should use policies that are known to be effective. There is little scope for affecting inequality with monetary policy. Reducing banks’ regulatory burden reduces inequality by improving the lives of Americans with the lowest incomes.” ~ Thomas L. Hogan
READ MORE“As in the planned economies, negative productivity gains and painful prosperity losses will be unavoidable. Because productivity gains are the basis for real wage increases, the benign long-term credit conditions of the ECB increasingly become a burden for the young people in Europe.” ~ Gunther Schnabl & Nils Sonnerberg
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