Topic: Monetary Policy

Economic Trends, Inflation, Monetary Policy

Prices Continue to Rise, Exceeding Fed Projections

– April 29, 2022

“The Fed seems resolved to see inflation climb further. I expect FOMC members will revise up their projections of inflation again in June. They should revise their course of action, to bring inflation down as planned, instead.” ~ William J. Luther

Central Banking, Economic Education, Monetary Policy

Asymmetric Average Inflation Targeting and Expectations

– April 27, 2022

“A conventional average inflation target would have anchored expectations and reduced the inflation risk of long-term contracting, promoting economic growth in the process. An asymmetric average inflation target falls far short of that goal.” ~ William J. Luther

Crisis, Economic Education, Inflation, Monetary Policy

Supply Disturbances Do Not Explain High Inflation

– April 25, 2022

“Unfortunately for the administration, their politically-convenient supply-side stories explain far too little. Today’s inflation is primarily the result of excessive nominal spending, which the Fed could have and should have offset.” ~ William J. Luther

Central Banking, Inflation, Monetary Policy

Yes, the High Inflation Rates Will Continue in 2022

– April 24, 2022

“A shift to a more restrictive monetary policy to control inflation is likely to result in a recession. One can only hope that the Fed is able to handle this transition better than it has handled the monetary policy of the recent past.” ~ James D. Gwartney & David Macpherson

Central Banking, Economic Education, 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

Economic Education, Free Trade, Monetary Policy

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

Central Banking, Economic Education, Monetary Policy

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

Central Banking, Crisis, Inflation, Monetary Policy

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

Central Banking, Economic Education, Monetary Policy

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

Central Banking, Fiscal Policy, Inflation, Monetary Policy

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

Central Banking, Economic Education, Government, Monetary Policy

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

Central Banking, Government, Inflation, Monetary Policy

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