Topic: Monetary Policy

Milei’s New Monetary Regime for Argentina

– July 19, 2024

“Despite its controversial nature, full dollarization remains the monetary regime with the most potential for long-term stability in Argentina. It offers a credible pathway to restore confidence and put the country back on a sustainable economic trajectory.” ~Nicolás Cachanosky

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Consumer Prices Decline in June

– July 12, 2024

“Interest rates tell us monetary policy is very tight. The money supply tells us monetary policy is somewhat tight. Will the Fed interpret recent data as a signal it’s time to pivot?” ~Alexander W. Salter

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Mortgage Rates Are Likely To Decline In the Near Future

– July 12, 2024

“Not that long ago, the real rate on Treasury bills was negative. The real rate on Treasury securities is temporarily high due to the Federal Reserve’s policy goal of lowering the inflation rate.” ~Gerald P. Dwyer

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Prices Decline in May, Monetary Policy Tightens

– June 28, 2024

“Prices today are 8.9 percentage points higher than they would have been had the Fed hit its 2-percent inflation target since January 2020.”

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There’s No Good Reason to Raise the Inflation Target

– June 24, 2024

“Why not give the central bank a wider berth, if it helps to stabilize the economy? Because it doesn’t actually help. Interest rates are a distraction.” ~Alexander W. Salter

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FOMC Holds Rates, Revises Forward Guidance

– June 12, 2024

“Just as the FOMC was slow to adjust policy when inflation surged in late 2021, it will be slow to adjust policy as inflation returns to and falls below its target in 2024.” ~William J Luther

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Prices Stable in May: Time to Cut Rates?

– June 12, 2024

“M2, the most commonly cited measure of the money supply, is up 0.53 percent from a year ago. Since real income and population are growing faster than this, current M2 growth also suggests money is tight. But this is speculative.” ~Alexander W. Salter

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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

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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

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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

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April’s Disinflation Delivery

– May 16, 2024

“In the first quarter of 2024, the US economy expanded at a rate of 1.6 percent per year. That’s hardly an impressive growth rate, but it’s significantly faster than money supply growth. Money looks somewhat tight.” ~Alexander W. Salter

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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

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