Inflation
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FOMC Projects Higher Inflation
“Fed Chair Jerome Powell’s November statement killed the idea that inflation would be transitory. The most recent projections from the FOMC show how deeply that idea has been buried.” ~ William J. Luther & Morgan Timmann
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How to Think about Inflation
“If we want to understand inflation, we need a framework to organize our thoughts. Economies are fiendishly complex; without a model that helps us focus on the relevant details, we’re lost in the woods.” ~ Alexander William Salter
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Do Greedy Countries Have Higher Inflation?
“Blaming big corporations for inflation no doubt serves the political interests of Sens. Warren and Sanders. But it is inconsistent with the available data. That is not surprising: It is inconsistent with standard monetary economics as well.” ~ Nicolás Cachanosky
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Inflation Rips Ahead of March FOMC Meeting
“The Fed should acknowledge that the inflation problem is much worse than it thought when it sets its course of action and adjust course accordingly. More likely, it will stay the course—and inflation will continue to outpace its projections.” ~ William J. Luther
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What Can the US Learn from Argentina’s Inflation?
“We can learn by looking at countries that have employed these strategies before. Inflation in the U.S. has been modest by Argentine standards. To keep it that way, the US must avoid repeating Argentina’s mistakes.” ~ Nicolás Cachanosky
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Inflation Exceeds Fed’s Projection
“I chalk it up to wishful thinking. Fed officials were not yet willing to tighten monetary policy. They hoped inflation would get better on its own. It didn’t, and their projections underestimated inflation as a result.” ~ William J. Luther
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Scapegoating Inflation Will Only Make It Worse
“For the sake of the economy and your grocery bills, let’s hope the administration’s threats of antitrust and price controls are not serious. If the administration really wants to tackle inflation, it needs the Fed to rein in its reckless monetary policy. ~ Kat Dwyer
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Fiscal Policy and Inflation
“When it comes to fiscal policy, we’re off the edge of the map. The typical stories told by unreconstructed Keynesians are clearly wrong. But that doesn’t mean we never need to worry about fiscal inflation.” ~ Alexander W. Salter
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Is This What Monetary Tightening Looks Like?
“When will the Federal Reserve begin to unwind its balance sheet this time? If the meeting minutes indicate the trajectory of policy, reductions will begin within the next two years.” ~ James L. Caton
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Price Controls?!
“Price controls are a bad idea. But support for them appears to be growing. They are a terrible tool for dealing with inflation. They make no effort to reduce nominal spending. And they exacerbate supply constraints.” ~ William J. Luther
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Death by Inflation or by Interest Rate Hikes?
“If central banks protect the value of the currency, they will create an economic crisis. If they try to avoid the economic crisis, they will destroy the value of the currency and cause a monetary crisis anyway.” ~ Daniel Fernández
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Inflation is High, Will Remain Elevated for Years
“At this stage, two things seem pretty clear: Inflation is high and will likely remain above target for a few years. My own view is that the FOMC is painting a rather rosy picture, and that market expectations provide a better guide for estimating inflation.” ~ William J. Luther
