Alexander W. Salter

  • Inflation: It’s Not the Supply Side

    ” Some combination of fiscal and monetary policy remains the best explanation for the once-in-a-generation inflation rates that peaked in summer 2022, as well as their gradual decline.” ~Alexander W. Salter

    Inflation: It’s Not the Supply Side
  • The Inflationary-Profits Hypothesis is Mush

    “Once a bastion of sound reporting, the Wall Street Journal’s economy desk is slowly descending into incoherence…Simple economics demonstrates why the inflationary-profits hypothesis is bunk.” ~Alexander W. Salter

    The Inflationary-Profits Hypothesis is Mush
  • Despite CPI Uptick, Monetary Policy Remains Tight

    “The slight bump in inflation won’t spook them into going even tighter. And despite the cries from financial markets, it’s too early to contemplate cuts.” ~Alexander W. Salter

    Despite CPI Uptick, Monetary Policy Remains Tight
  • Disinflation Dream Come True

    “The Fed will probably keep the fed funds target range unchanged in December. Officials previously signaled additional tightening, but things have changed.” ~Alexander W. Salter

    Disinflation Dream Come True
  • Timiraos on Supply-Side Disinflation

    “Slowing down total spending growth (current-dollar GDP) by hiking interest rates and shrinking the balance sheet clearly mattered. Supply-side improvements do too, but they’re likely playing the role of the sidekick rather than the hero.” ~Alexander W. Salter

    Timiraos on Supply-Side Disinflation
  • The Fed Delivered Disinflation

    “Most prices are higher today than they would have been had they grown at an average rate of 2 percent since January 2020. We oughtn’t pin a medal on an arsonist’s chest for putting out a fire he started.” ~Alexander W. Salter

    The Fed Delivered Disinflation
  • The FOMC Was Right to Not Hike

    “The best approach for the FOMC is to keep its rate target where it is. We should wait for additional inflation data in November before calling for even-tighter monetary policy.” ~Alexander W. Salter

    The FOMC Was Right to Not Hike
  • Alan Blinder: Let Them Eat Disinflation

    “Blinder thinks deflation always and everywhere causes economic harm. ‘It takes a truly sick economy to cause deflation,’ he warns. But he’s wrong.” ~Alexander W. Salter

    Alan Blinder: Let Them Eat Disinflation
  • Rising Treasury Yields Can’t Substitute for Fed Rate Hikes

    “If the yield curve is the explanation, then market forces aren’t ‘substituting’ for Fed policy. They’re simply reflecting an economic transition from one microeconomic equilibrium in the market for loanable funds to another.” ~Alexander W. Salter

    Rising Treasury Yields Can’t Substitute for Fed Rate Hikes
  • Forced Reconversion to that “Old-Time Fiscal Religion”

    “Circumstances beyond our control will likely compel us to revert to something like the ‘old-time fiscal religion’ of balanced budgets during ordinary times, reserving deficits for extraordinary times.” ~Alexander W. Salter

    Forced Reconversion to that “Old-Time Fiscal Religion”