Monetary Policy
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The Demise of the Dual Banking System
“The issue comes down to whether a state-chartered bank that fulfills the legal requirements for a master account can be denied one by the Federal Reserve.” ~Gerald P. Dwyer
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April’s Disinflation Delivery
“In the first quarter of 2024, the US economy expanded at a rate of 1.6 percent per year. That’s hardly an impressive growth rate, but it’s significantly faster than money supply growth. Money looks somewhat tight.” ~Alexander W. Salter
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Is The Fed Manipulating the Market?
“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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Chairman Powell and The Fed’s Limits
“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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Getting Monetary Policy Back on Track
“Experts seemingly identify much more closely with the central bankers — the practitioners of monetary policy — than with those forced to contend with the negative consequences of bad decisions.” ~Judy Shelton
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The Ratchet Effect on the Fed’s Balance Sheet
“The ratchet effect has locked us in a world with a massive Fed balance sheet — and the insidious problems of runaway deficit spending and easy bailout monetary expansion that come with it.” ~ Paul Mueller
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Is Argentine Disinflation Sustainable?
“Milei’s lack of political support in Congress adds to the uncertainty surrounding his ability to successfully pass deregulatory reforms… it is premature to declare victory on the fiscal and inflationary fronts in Argentina.” ~Nicolás Cachanosky
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The New Zimbabwean ZiG: Sixth Time a Charm?
“Even the most faithfully implemented commodity-backed money standard is fundamentally predicated on the integrity and competence of its overseers.” ~Peter C. Earle
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A Better Model Won’t Fix The Fed
“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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Why Haven’t We Whipped Inflation Yet?
“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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How the US Treasury Induced a New Era of Swiss Monetary Policy
“Central bankers are told that their domestic monetary policy obligations…must be balanced with or even subjugated to currency management practices that accommodate American exporters and competitors more broadly.” ~Mariana F. Trujillo and Peter C. Earle
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The Fed and Political Independence: It’s Complicated
“We should focus less on who’s allowed to run the Fed and more on what the Fed’s allowed to do in the first place.” ~Alexander W. Salter
