Monetary Policy

  • Accounting for Inflation

    “The great irony is that inflation would have been transitory if only the Fed had stabilized nominal spending. Prices would have risen above trend to reflect below-trend production and then returned to trend as production recovered.” ~ William J. Luther & Morgan Timmann

    Accounting for Inflation
  • Prices Rose Even Faster In June

    “Inflation has been too high for too long. Bringing inflation back down should be the Federal Reserve’s top priority.” ~ William J. Luther

    Prices Rose Even Faster In June
  • Price Stability and the Fed

    “Politics is compromise. Half a loaf is better than no loaf at all. Price stability is the half-loaf of monetary policy rules. It seems foolish to go hungry simply because haute cuisine is unaffordable.” ~ Alexander William Salter

    Price Stability and the Fed
  • There Are Good Reasons for Monetary Rules

    “A good monetary rule does not only identify an appropriate course of action in advance. It also requires monetary policymakers to take that course and, in doing so, reduces the uncertainty businesses and consumers face.” ~ Nicolás Cachanosky

    There Are Good Reasons for Monetary Rules
  • The Corrective Contraction

    “This mild recession will soon pass. Lower growth due to a higher trend inflation rate can persist forever—and will if the Fed fails to do its job.” ~ William J. Luther

    The Corrective Contraction
  • Inflation and the Fed’s Failure to Act

    “Fed officials must prioritize monetary stability over political objectives such as inequality and climate policy. To simplify its operations, the Fed should consider returning to the pre-2008 corridor system of monetary policy.” ~ Thomas L. Hogan

    Inflation and the Fed’s Failure to Act
  • Should the Fed Stimulate Growth?

    “Rather than consider whether the Fed should stimulate growth, we should recognize that its primary task is to prevent over- and under-production.” ~ William J. Luther

    Should the Fed Stimulate Growth?
  • The Race to Tame Inflation Expectations

    “If the FOMC thinks inflation should be higher than 2 percent on average, it should adopt a higher inflation target—say, 3 percent—and compensate for periods of excess inflation by also promoting inflation rates below the average target for extended periods.” ~ James L. Caton

    The Race to Tame Inflation Expectations
  • Not so Modern Monetary Theory

    “If the issue of an unbacked or insufficiently-backed currency exceeds the amount needed to pay the tax, and even exceeds the amount in demand as a medium of exchange, the value of that currency will fall (or, there will be inflation).” ~ Gary M. Pecquet & Clifford F. Thies

    Not so Modern Monetary Theory
  • Is the Fed Finally Serious About Inflation?

    “Chair Powell has repeatedly claimed that the Fed will use its tools to create price stability. Will he and other Fed officials finally bring inflation back toward their stated two percent target?” ~ Thomas L. Hogan

    Is the Fed Finally Serious About Inflation?
  • Fed Must Act Now to Stop Runaway Inflation

    “Fed Chair Jerome Powell promised more than six months ago that the Fed would ‘use our tools to make sure that higher inflation does not become entrenched.’ Its actions, however, indicate otherwise.” ~ Thomas L. Hogan

    Fed Must Act Now to Stop Runaway Inflation
  • Monetarism Remains a Useful Guide on Inflation

    “If the Federal Reserve raises interest rates too quickly, sharply declining M2 growth will signal the risk of recession. Monitoring M2 growth can help in making sure the Fed tightens monetary policy at the appropriate pace, not too fast and not too slow.” ~ Peter N. Ireland

    Monetarism Remains a Useful Guide on Inflation