Monetary Policy
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Fixing A Big Mistake in Risk-Based Capital Rules
“Both long Treasuries and mortgage-backed securities guaranteed by government agencies are in current regulation included as ‘High Quality Liquid Assets.’ But of course they both can and have created plenty of interest rate risk.” ~Alex J. Pollock
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Young People Aren’t Nearly Angry Enough About Government Debt
“We each owe more than $100,000 as a share of the national debt… Our earning years are subsidizing not our own economic coming-of-age, but retirement and medical benefits for people who navigated a less-challenging wealth-building landscape.” ~Laura Williams
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Inflation Remains Elevated. Is Money Actually Tight?
” Fed watchers expect the Federal Open Market Committee will keep rates steady when they meet on March 19-20. In light of the CPI data, that’s a defensible move.” ~Alexander W. Salter
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The Fed (Almost) Ruined Black Friday
“A record $1.3 trillion in credit card debt may be masking a weaker economy than the top-line spending numbers suggest, as consumers accrue debt to maintain a standard of living being crushed by rising prices in housing, groceries, and energy.” ~Spence Purnell
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Does Argentina Have Enough Dollars to Dollarize?
“It’s not that Argentina lacks dollars. Rather, it is that the Argentine government lacks the will to commit to its dollarization plan.” ~Nicolás Cachanosky
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Faster Growth and Interest Rates: Even Harder than You Think
“Higher rates could be a sign of loose money, not tight, depending on how far from the policy change we’re looking and how fast the market adapts.” ~ Alexander W. Salter
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Is Inflation on the Rise Again?
“The Fed should be looking ahead and adjusting monetary policy in light of its forecasts. Instead, its eyes are fixed on the rear-view mirror.” ~William J. Luther
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Congress Overspends, but the Fed Inflates
“At most, large deficits impelled the Fed to support the market for government debt by purchasing more debt than it should have. The central bank, not the fiscal authorities, is the residual determiner of aggregate demand.” ~Alexander W. Salter
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Two Kinds of Transitory Inflation
“Team Transitory’s narrative just doesn’t cohere. Whether we’re trying to explain the Great Inflation of the 1970s and early 1980s, or the inflation of the past two years, we need to rely on demand-side mechanisms.” ~Alexander W. Salter
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An Inflation Resurgence, or Just Relative Price Changes?
“Microeconomic relative-price dynamics increasingly drive inflation measurements. That means the Fed should not be afraid to ease off the brakes.” ~Alexander W. Salter
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AIER’s Everyday Price Index Rises 0.52 Percent in January 2024
“The January 2024 CPI report highlights the challenges of returning inflation to the Fed’s target range and suggests a bumpy road ahead.” ~Peter C. Earle
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Time to Tame the “Apolitical” Fed?
“The Fed’s self-conception as an apolitical technocracy blinds it to the degree to which it has weighed in on fundamental political issues, which instead ought to be deliberated in Congress.” ~Alexander W. Salter
