Monetary Policy
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Weak Economy Provides Key Policy Lessons
“Sure, supply-side factors contributed to higher prices in some markets, as did supply chain bottlenecks. But those are short-term fluctuations that don’t tell the entire story of reduced purchasing power for everyone.” ~Vance Ginn
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Forced Reconversion to that “Old-Time Fiscal Religion”
“Circumstances beyond our control will likely compel us to revert to something like the ‘old-time fiscal religion’ of balanced budgets during ordinary times, reserving deficits for extraordinary times.” ~Alexander W. Salter
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Steady As She Goes
“But even if new PCE figures confirm a bump in the disinflationary road, it’s still likely best for the FOMC to hold off on further rate hikes.” ~Alexander W. Salter
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AIER’s Everyday Price Index Rises 0.29 Percent in September 2023
“Spots of price momentum in the September CPI support the Federal Reserve’s higher-for-longer mantra, and raise the possibility that even now policy rates are insufficiently restrictive.” ~Peter C. Earle
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Catch-up Inflation
“Where there is collective bargaining, workers go on strike to demand higher wages in order to catch-up to inflation. Elsewhere in the economy, individual workers bargain for higher wages with their current employer, or begin searching for better-paying jobs.” ~Clifford Thies
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Inflationary Growth is Fake News
“Economic growth means more output. Comparatively less money chases comparatively more goods. All else equal, prices across the economy should fall.” ~Alexander W. Salter
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Inflation was Worse than We Thought
“Although Fed officials were late to tighten monetary policy, their efforts over the last year appear to have worked. The risk today is that monetary policy is too tight—and will remain so for too long.” ~William J. Luther
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How Crazy Do You Have to Be to Support Dollarization?
“The whole reason why it is an advantage for a developing country to tie to a major country is that historically speaking the internal policies of developing countries have been very bad. US policy has been bad, but their policies have been far worse.” ~Nicolás Cachanosky
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What Should the Federal Reserve Do Now?
“Inflation is running above 2 percent by any measure, and a current temporarily higher rate on short-term securities can reassure markets that the Federal Reserve is aiming at a lower inflation rate.” ~Gerald P. Dwyer
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Another Rate Hike? Let’s Not
“Interest rate and liquidity data point to the same conclusion: monetary policy is sufficiently tight. Further tightening could cause a painful economic contraction.” ~Alexander W. Salter
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•
Weak Economy Provides Key Policy Lessons
“Sure, supply-side factors contributed to higher prices in some markets, as did supply chain bottlenecks. But those are short-term fluctuations that don’t tell the entire story of reduced purchasing power for everyone.” ~Vance Ginn
-
•
Forced Reconversion to that “Old-Time Fiscal Religion”
“Circumstances beyond our control will likely compel us to revert to something like the ‘old-time fiscal religion’ of balanced budgets during ordinary times, reserving deficits for extraordinary times.” ~Alexander W. Salter
-
•
Steady As She Goes
“But even if new PCE figures confirm a bump in the disinflationary road, it’s still likely best for the FOMC to hold off on further rate hikes.” ~Alexander W. Salter
-
•
AIER’s Everyday Price Index Rises 0.29 Percent in September 2023
“Spots of price momentum in the September CPI support the Federal Reserve’s higher-for-longer mantra, and raise the possibility that even now policy rates are insufficiently restrictive.” ~Peter C. Earle
-
•
Catch-up Inflation
“Where there is collective bargaining, workers go on strike to demand higher wages in order to catch-up to inflation. Elsewhere in the economy, individual workers bargain for higher wages with their current employer, or begin searching for better-paying jobs.” ~Clifford Thies
-
•
Inflationary Growth is Fake News
“Economic growth means more output. Comparatively less money chases comparatively more goods. All else equal, prices across the economy should fall.” ~Alexander W. Salter
-
•
Inflation was Worse than We Thought
“Although Fed officials were late to tighten monetary policy, their efforts over the last year appear to have worked. The risk today is that monetary policy is too tight—and will remain so for too long.” ~William J. Luther
-
•
How Crazy Do You Have to Be to Support Dollarization?
“The whole reason why it is an advantage for a developing country to tie to a major country is that historically speaking the internal policies of developing countries have been very bad. US policy has been bad, but their policies have been far worse.” ~Nicolás Cachanosky
-
•
What Should the Federal Reserve Do Now?
“Inflation is running above 2 percent by any measure, and a current temporarily higher rate on short-term securities can reassure markets that the Federal Reserve is aiming at a lower inflation rate.” ~Gerald P. Dwyer
-
•
Another Rate Hike? Let’s Not
“Interest rate and liquidity data point to the same conclusion: monetary policy is sufficiently tight. Further tightening could cause a painful economic contraction.” ~Alexander W. Salter