Topic: Monetary Policy

Financial Markets, Inflation, Monetary Policy

Rising Inflation Expectations Pose a New Threat to Fed Efforts

– October 20, 2022

“Herding, of sorts, may thwart the effects of contractionary monetary policy measures to some degree. The Fed has a tough job ahead of it, one which may have just become a bit tougher.” ~ Peter C. Earle

Central Banking, Inflation, Monetary Policy

Inflated Hopes and Burst Bubbles

– October 18, 2022

“The Fed’s chief task is to restore its lost credibility. In retrospect, the switch to average inflation targeting was a mistake. It gave the Fed plausible deniability for noisier, less predictable policy.” ~ Alexander William Salter

Currency, Financial Markets, Monetary Policy

King Dollar’s Uncertain Throne

– October 12, 2022

“With continuing dollar appreciation the likelihood of trade tensions and protectionism increase, as do the possibilities of organized labor agitation. King Dollar is secure for now, but as in all palaces – intrigues persist.” ~ Peter C. Earle

Central Banking, Economic Education, Monetary Policy

Against Interest Rate Reductionism

– October 4, 2022

“Monetary policy is about money, not interest rates. Central bankers should stop trying to implement monetary policy by messing with relative prices. There are better measures and more effective transmission mechanisms.” ~ Alexander William Salter

Central Banking, Cryptocurrency, Economic History, Monetary Policy

The Unquestioned Monopoly

– October 3, 2022

“Despite the arguments made against monopoly and the arguments made in favor of competition, there is one monopoly that largely goes unquestioned. I’m referring, of course, to the monopoly over currency issuance.” ~ Joshua R. Hendrickson

Crisis, Inflation, Monetary Policy

Is The Fed Trying To Inflate Away US Debt?

– September 28, 2022

“The ease with which the concept is expressed, as if debt were an ice cube left on a driveway on a summer day, betrays the numerous costs associated with such a scheme. And that holds whether the undertaking is intentional or not.” ~ Peter C. Earle

Central Banking, Inflation, Monetary Policy

Interest Rates and Fed Tightening

– September 28, 2022

“While interest rates can sometimes be useful as a policy barometer, the various monetary measures (from the monetary base at narrowest to total nominal expenditures at broadest) matter far more.” ~ Alexander William Salter

Economic Education, Financial Markets, Monetary Policy

Revisiting the Pokéflation

– September 26, 2022

“During the massively expansionary monetary response to the Covid outbreak, the price of Pokemon cards and other assets shot to unprecedented levels. Contractionary monetary policy now has the opposite effect.” ~ Peter C. Earle & April Liu

Economic History, Government, Monetary Policy

Volcker and the Great Inflation: Reflections for 2022

– September 20, 2022

“Volcker’s victory over runaway inflation was not permanent, because the temptation to governments and their central banks of excessive printing, monetization of government deficits, and levying inflation taxes is permanent.” ~ Alex J. Pollock

Central Banking, Inflation, Monetary Policy

Financial Stability and the Fed

– September 16, 2022

“The Fed failed at its initial task of promoting financial stability. It has failed at conducting monetary policy as well. Given the Fed’s major financial-policy and monetary-policy errors since 2008, we should explore major structural changes.” ~ Alexander William Salter

Crisis, Inflation, Monetary Policy

Five Questions for Fed Chair Jerome Powell

– September 16, 2022

“After each meeting, Chair Powell holds a press conference where he takes questions from the media. Most reporters ask about the state of inflation or the Fed’s interest rate decisions, while important policy questions go unasked.” ~ Thomas L. Hogan

Government, Inflation, Monetary Policy

How to Make Disinflation Less Scary

– September 15, 2022

“Economists are correct in warning the public about the likely costs of disinflation. But leaders within and outside the Fed should not sit back and take these costs as given.” ~ Peter N. Ireland