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The Sound Money Project was founded in January 2009 to conduct research and promote awareness about monetary stability and financial privacy. The project is comprised of leading academics and practitioners in money, banking, and macroeconomics. It offers regular commentary and in-depth analysis on monetary policy, alternative monetary systems, financial markets regulation, cryptocurrencies, and the history of monetary and macroeconomic thought. For the latest on sound money issues, subscribe to our working paper series and follow along on Twitter or Facebook.
Advisory Board: Steve H. Hanke, Jerry L. Jordan, Lawrence H. White
Director: William J. Luther
Senior Fellows: Nicolás Cachanosky, Gerald P. Dwyer, Joshua R. Hendrickson, Thomas L. Hogan, Gerald P. O’Driscoll, Jr., Alexander W. Salter
Fellows: J.P. Koning
“Prices today are 8.9 percentage points higher than they would have been had the Fed hit its 2-percent inflation target since January 2020.”
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“Just as the FOMC was slow to adjust policy when inflation surged in late 2021, it will be slow to adjust policy as inflation returns to and falls below its target in 2024.” ~William J Luther
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“M2, the most commonly cited measure of the money supply, is up 0.53 percent from a year ago. Since real income and population are growing faster than this, current M2 growth also suggests money is tight. But this is speculative.” ~Alexander W. Salter
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“While inflation is declining once more, members of the Federal Open Market Committee (FOMC) have suggested rates would need to remain high for longer than they had previously projected.” ~William J. Luther
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“We cannot just look at the Fed’s target rate to determine whether it is manipulating the market. We must consider its target rate relative to the natural rate.” ~Bryan Cutsinger
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“Congress should applaud Chairman Powell’s candor on uncertainty and strongly support his principle of operating the Fed within the limits of its mandate.” ~Alex J. Pollock
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“Market participants continue to expect the Fed will cut its federal funds rate target this year — just not anytime soon.” ~ William J. Luther
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“The whole point of expectations-responsive monetary policy is to remove the discretionary and technocratic elements from central banking. Disappointingly but unsurprisingly, the Fed is doing the opposite: doubling down on discretion and technocracy.” ~Alexander W. Salter
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“The best we can do is recalibrate models when we get new data. But that’s like driving the car while looking out the rearview window…hardly ideal for knowing how to adjust your steering.” ~Alexander W. Salter
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“Regardless of whether one thinks that the CPI should include interest rates and/or asset prices, it seems clear that consumers factor in these costs when evaluating the cost of living.” ~Joshua R. Hendrickson
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“Market participants continue to expect three cuts this year — and that those cuts will begin in the first half of the year. But they have adjusted the odds.” ~William J. Luther
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“By fueling an overall increase in demand, central banks can generate a sustained increase in the general level of prices — inflation. Central banks are the primary source of money creation, not firms.” ~Nicolás Cachanosky
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