Topic: Monetary Policy

Mandate Drift at the Fed Is Par for the Course

– April 24, 2022

“We must decide, so long as we have a central bank, what we want it to do. The best feasible reforms tighten the Fed’s leash. A constrained Fed is a competent Fed. A drifting Fed is a danger to the public.” ~ Alexander William Salter


Trade, Debt, and Growth

– April 21, 2022

“What are we getting for this unprecedented debt? Mostly, all it’s purchased for us is political leadership which can only charitably be characterized as mediocre.” ~ Robert F. Mulligan


Why the Money Supply Should (Sometimes) Change

– April 4, 2022

“In the long run, the money supply isn’t that important. But in the short- to medium-run, it’s pretty important. There are good reasons for the money supply to change.” ~ Alexander William Salter


Has the Fed Abandoned Its Average Inflation Target?

– April 1, 2022

“Despite affirmations to the contrary, the Fed appears to have abandoned its average inflation target. Excessive nominal spending has pushed prices well above the level consistent with the Fed’s average inflation target.” ~ William J. Luther


Who Needs the Dual Mandate?

– March 28, 2022

“The American public understands inflation and policymakers have a reasonable degree of control over it. When choosing a policy rule, we need humility first and foremost. Let’s stop asking the Fed for more than it can deliver.” ~ Alexander William Salter


Government Debt and Inflation: Reality Intrudes

– March 22, 2022

“Sooner or later, absent substantially lowering government spending or raising taxes, interest payments will overwhelm the government’s budget. The situation might even be termed a sovereign debt crisis.” ~ Gerald P. Dwyer


How the Fed Painted Us into a Corner

– March 19, 2022

“Over the months and years to come, it will be very interesting to see how faithfully the Fed pursues its policy of returning interest rates to normal and sustainable levels—approximately 3-4 percent for the federal funds rate.” ~ Robert F. Mulligan


What Should Be Done to Fight Inflation? A U.S. Lawmaker Interviews Two Michigan Economists

– March 18, 2022

“The conversation centered around recent comments by US Federal Reserve Bank Chairman Jerome Powell, and how the Federal Reserve intends to bring our 40-year high inflation rate down to levels prior to 2021.” ~ Dr. Timothy G. Nash


FOMC Projects Higher Inflation

– March 18, 2022

“Fed Chair Jerome Powell’s November statement killed the idea that inflation would be transitory. The most recent projections from the FOMC show how deeply that idea has been buried.” ~ William J. Luther & Morgan Timmann


Do Greedy Countries Have Higher Inflation?

– March 11, 2022

“Blaming big corporations for inflation no doubt serves the political interests of Sens. Warren and Sanders. But it is inconsistent with the available data. That is not surprising: It is inconsistent with standard monetary economics as well.” ~ Nicolás Cachanosky


Everything Is the Fed’s Fault: A Review of the Fiat Standard

– March 10, 2022

“The aggressive tone aside, the emphasis on a fiat mindset – one where you get something for nothing and can have something merely by decree – is valuable. The thesis remains unproven, but the proposition lingers long after the final page.” ~ Joakim Book


Stages of Quantitative Tightening

– March 9, 2022

“There are several steps to go before the Federal Reserve starts selling assets to reduce the size of its balance sheet. That type of active tightening will probably not begin for a while.” ~ Thomas L. Hogan