Scapegoating Inflation Will Only Make It Worse
“For the sake of the economy and your grocery bills, let’s hope the administration’s threats of antitrust and price controls are not serious. If the administration really wants to tackle inflation, it needs the Fed to rein in its reckless monetary policy. ~ Kat Dwyer
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Fiscal Policy and Inflation
“When it comes to fiscal policy, we’re off the edge of the map. The typical stories told by unreconstructed Keynesians are clearly wrong. But that doesn’t mean we never need to worry about fiscal inflation.” ~ Alexander W. Salter
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Is This What Monetary Tightening Looks Like?
“When will the Federal Reserve begin to unwind its balance sheet this time? If the meeting minutes indicate the trajectory of policy, reductions will begin within the next two years.” ~ James L. Caton
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Price Controls?!
“Price controls are a bad idea. But support for them appears to be growing. They are a terrible tool for dealing with inflation. They make no effort to reduce nominal spending. And they exacerbate supply constraints.” ~ William J. Luther
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Death by Inflation or by Interest Rate Hikes?
“If central banks protect the value of the currency, they will create an economic crisis. If they try to avoid the economic crisis, they will destroy the value of the currency and cause a monetary crisis anyway.” ~ Daniel Fernández
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Inflation is High, Will Remain Elevated for Years
“At this stage, two things seem pretty clear: Inflation is high and will likely remain above target for a few years. My own view is that the FOMC is painting a rather rosy picture, and that market expectations provide a better guide for estimating inflation.” ~ William J. Luther
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Greedy Corporations and Inflation
“Only a monetary policy geared to reduce inflation will be effective in reducing inflation. This is as true now as when the Federal Reserve lowered inflation in the early 1980s.” ~ Gerald P. Dwyer
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What the Hell is Inflation Anyway?
“Words mean different things to different people, and their meanings change over time. How we define inflation is a matter of choice, but we must also recognize that choice reflects more fundamental beliefs about how the economy functions.” ~ Michael J. Douma
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Why Deficits Matter
“If we want to argue deficits matter more conventionally, we’ll have to do some more theoretical heavy lifting. The usual aggregate demand stories we tell don’t cut it.” ~ Alexander William Salter
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Inflation in Oil Prices Will Soon Slow to Zero
“One thing we can confidently project about 2022 is that year-to-year measures of ‘inflation’ in prices of used cars and energy will be near zero by the third quarter, if not below zero. That is nearly a sure thing, baked-in-the cake.” ~ Alan Reynolds
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AIER Leading Indicators Index Remains Neutral for a Third Consecutive Month
“The AIER Leading Indicators index held steady again in December, coming in at a neutral 50 for a third month. The result suggests continued economic expansion but with elevated risks. Shortages of labor and materials continue to sustain upward pressure on prices but there may be some early signs of easing for some of those issues.” ~ Robert Hughes
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The Fed’s Higher Fed Funds Rate Projections Mean What?
“It is rarely prudent to assume that a central bank’s central planners can predict the future better than you can, or that they really know what they are doing and why.” ~ Alan Reynolds
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