Monetary Policy

The Fed Is Bankrupt

“The most recent data show that the Fed owes the Treasury over $41 billion, which exceeds its total capital. The Fed, by common standards, is indeed insolvent.” ~ Thomas L. Hogan

Interest Rates, the Money Supply, and Say’s Law

“Say’s Law absolutely helps us understand booms and busts on the demand side, but because of its emphasis on money, not interest rates.” ~ Alexander William Salter

What’s To Blame for the Banking Crisis?

“It’s crucial for policymakers to not revert to zero interest rates and ample liquidity, and go down the same cycle once again.” ~ Siddharth Gundapaneni

Have We Crested the Inflation Wave?

“My view is the Fed should pause its rate hikes in the short-run. Disintermediation might be the cause of recent money-supply trends. In the long-run, the Fed should resume forward guidance, but not on interest rates.” ~ Alexander William Salter

Hamilton Unbound: Finance and the Creation of the American Republic

Silicon Valley Bank: Mismanagement Is Not an Excuse for Inefficient Regulation

“The mismanagement was endogenous to the regulatory regime. Rather than promoting financial stability, regulators have undermined it. Doubling down on a failed strategy will not make things better.” ~ Nicolás Cachanosky

Inflation Slowed in February, But Remained High

“Recent experience should prompt calls for the Fed to adopt a symmetric average inflation target when it reevaluates its mandate in 2024 and 2025.” ~ William J. Luther

Politics, Not Markets, Makes Banking Unstable

“Banking reform should rank high on our list of policy priorities, but moving away from fractional reserves shouldn’t be a part of the conversation.” ~ Alexander William Salter

Lessons from the Phillips Curve

“The exploration of the Phillips Curve has taken many different paths and yet somehow ended up in the same place. The world could have been spared much of this meandering with a more firm grounding in what theory does and does not tell us.” ~ Joshua R. Hendrickson

Monetary Policy and that Old-Time Fiscal Religion

“Nominal income targeting can potentially restore the old-time fiscal religion. Like the classical gold standard, this approach stabilizes total spending in the economy, rendering counter-cyclical fiscal policy unnecessary and ineffective.” ~ Bryan P. Cutsinger & Louis Rouanet

Money and Inflation Are Still Related

“M2 in 2020 and 2021 increased by the largest percentages in the last 60 years. To the surprise of the Federal Reserve (although not everyone), inflation resulted.” ~ John Devereux & Gerald P. Dwyer

Fed Raises Rate, But Signals Potential Pause in May

“In 2021 they were looking for help from recovering supply chains. Now, they are looking for help from tight financial markets. It’s time FOMC members help themselves — or, God help us all.” ~ William J. Luther