Alexander W. Salter
Time for the Fed to Ease Up
“Even if Fed economists have underestimated the natural rate of interest by half, monetary policy looks slightly tight. It looks very tight if the natural-rate figures are anywhere close to correct.” ~Alexander W. Salter
Happy New Year! Have Some Inflation
“After a rough couple of rounds, inflation has come out swinging. It doesn’t have the legs for a knockout punch, but it remains a troublesome opponent.” ~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
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
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
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
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
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 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
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
