Topic: Monetary Policy

Monetarism Remains a Useful Guide on Inflation

– July 12, 2022

“If the Federal Reserve raises interest rates too quickly, sharply declining M2 growth will signal the risk of recession. Monitoring M2 growth can help in making sure the Fed tightens monetary policy at the appropriate pace, not too fast and not too slow.” ~ Peter N. Ireland


Inflation, Unemployment, and Fed Credibility

– July 11, 2022

“Any time it looks like there’s a tradeoff between unemployment and inflation, something has gone very wrong. We could’ve avoided both horns of the dilemma if the Fed had done its job.” ~ Alexander William Salter


Hollywood’s Monetary Policy

– July 8, 2022

“What is fact versus fiction in this story? While we should surely be wary of Fed-induced risk taking and credit misallocation, I’m skeptical that this was a major problem in the QE period.” ~ Thomas L. Hogan


Strike Three for the Federal Reserve

– July 4, 2022

“No batter always gets on base but America, nay the world, has a high-quality pinch hitter that it benched a century ago: the Gold Standard. It’s not perfect but it is far better, and fairer, than the Fed.” ~ Robert E. Wright


Inflation Increased In May, New Data Show

– July 1, 2022

“It is difficult to say precisely when the inflation tide will turn. But consumers should expect inflation to remain high throughout the rest of the year.” ~ William J. Luther


Inflation and Time

– June 30, 2022

“The monetary regime that we have had since Richard Nixon closed the gold window is one of persistent price inflation. A comparison of money prices today and money prices in 1971 are essentially meaningless.” ~ Joshua R. Hendrickson


Better Explanations for Inflation

– June 29, 2022

“We have enough information to conclude policy mistakes, especially on the demand side, go a long way toward explaining today’s inflation.” ~ Alexander William Salter


Will Federal Reserve Losses Impact Fed Shareholders or Affect Monetary Policy?

– June 25, 2022

“Since it started raising interest rates, the Fed has already experienced mark-to-market losses of epic proportions, and will soon face large operating losses, something it has never seen in its 108-year history.” ~ Paul H. Kupiec & Alex J. Pollock


Bad Explanations for Inflation

– June 23, 2022

“Hopefully, these lousy explanations will soon fade out of the public’s consciousness. We need to focus on what matters: a comparative abundance of money over goods. ” ~ Alexander William Salter


FOMC Projects Even Higher Inflation

– June 17, 2022

“The Fed is not even committed to bringing inflation back down to 2 percent very quickly. The median FOMC member currently projects inflation will remain above target through 2024. We had better get used to high inflation. We will likely be dealing with it for years.” ~ William J. Luther & Morgan Timmann


We Still Need Milton Friedman

– June 13, 2022

“Monetary policy should be about money—not specific markets, but their common denominator. The sooner we enlist Friedman to help ‘run the show,’ the faster we can clean up our economic messes.” ~ Alexander William Salter


Putting “Money” Back in “Monetary Policy:” A Response to Dan McLaughlin

– June 11, 2022

“The way we fix things is by carefully diagnosing demand-side and supply-side problems. When it comes to demand, we’re talking about central bank activity. Unfortunately, none of McLaughlin’s four points are in the ballpark.” ~ Alexander William Salter