Should the Fed Stop Tightening?
“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?
“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
“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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Beware the Soft Landing Narrative (Video)
“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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Welcome the Disinflation, Beware the Narrative
“Let us all hope that disinflation proceeds expeditiously and, if it does, we remain mindful that the outcome is in spite of, rather than owing to, central bankers and their narrow assortment of lagging and unpredictable policy instruments.” ~ Peter C. Earle
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Wage and Price Controls Are Not the Answer to Inflation
“If the US imposed economy-wide price controls, as Krugman proposes, it would not stop inflation, just as the Emperor Diocletian’s economy-wide controls did not stop Roman inflation and just as the 1970s economy-wide controls did not stop US inflation.” ~ Raymond C. Niles
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FOMC Ratchets Up Inflation Projection
“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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Putting Aggregate Demand and Aggregate Supply to Work
“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
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Does Government Spending Lead to Inflation?
“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
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Supply, Demand, and Inflation: The Big Picture
“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
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Fed Slows Pace of Rate Hikes
“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
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After Three Holiday Seasons, Pandemic Monetary Policy Still Driving up Prices
“The HDAY Index and TDAY Index lead to the same irrefutable conclusion: the ongoing cost of policies implemented to mitigate the spread of COVID are large and, almost three years later, proving disconcertingly persistent.” ~ Peter C. Earle
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