“Responsible students of monetary policy must vigorously resist the ‘powerless Fed’ myth. All it does is absolve central bankers of responsibility for what, on the basis of good theory and mounting evidence, is primarily their fault to begin with.” ~ Alexander William Salter
READ MORE“The recent uptick in inflation is worrying, and the Fed needs to get a handle on the situation before higher inflation expectations become entrenched. But the Fed doesn’t need to take a sledgehammer to labor markets to ease the economy’s pricing pressures.” ~ Alexander William Salter
READ MORE“Providing revenue to the state is one of the reasons (and, perhaps the primary reason) governments worldwide monopolize the issuance of high-powered money.” ~ Bryan Cutsinger
READ MORE“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
READ MORE“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
READ MORE“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
READ MORE“I would keep my eye on the LEI (and AIER’s equivalent) but pay special attention to the manufacturing variables. Outside of the LEI, I would also carefully watch real wage trends and its downstream knockoffs (credit card and other debt and defaults, and the personal savings rate).” ~ Robert E. Wright
READ MORE“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
READ MORE“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
READ MORE“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
READ MORE“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
READ MORE“Earle thinks a more charitable version of the Fed’s handling of monetary policy over the last three years might emerge, resulting in less public skepticism about the limits of monetary policy.” ~ AIER
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