Monetary Economics
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Rising Treasury Yields Can’t Substitute for Fed Rate Hikes
“If the yield curve is the explanation, then market forces aren’t ‘substituting’ for Fed policy. They’re simply reflecting an economic transition from one microeconomic equilibrium in the market for loanable funds to another.” ~Alexander W. Salter
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Does a Blowout Third-Quarter GDP Number Vindicate Bidenomics?
“US citizens will, in the event of an uncommonly strong third-quarter US GDP release, benefit from taking close note of political self-aggrandizement made in its wake. Upcoming GDP releases may require reminding administration officials of statements made tomorrow regarding the prospects of Bidenomics.” ~Peter C. Earle
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Inflation Ticks Up Again. Keep an Eye on Oil
“Major changes in oil prices seem likely to drive the near-term changes in CPI inflation, both headline inflation and possibly core as well. Another big question is how the Fed will respond.” ~Thomas L. Hogan
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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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Worst US Bond Selloff Since 1792
“The failure of numerous banks at once can damage the economy, as bank failure waves did during the Great Depression, the Savings and Loan crisis in the 1980s, and the 2007-10 meltdown.” ~Robert E. Wright
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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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Wishful (Protectionist) Thinking
“Specialization and productivity increase when the market’s size extends across national borders. But tariffs reduce the extent of the market and thereby reduce specialization.” ~Paul Mueller
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•
Rising Treasury Yields Can’t Substitute for Fed Rate Hikes
“If the yield curve is the explanation, then market forces aren’t ‘substituting’ for Fed policy. They’re simply reflecting an economic transition from one microeconomic equilibrium in the market for loanable funds to another.” ~Alexander W. Salter
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•
Does a Blowout Third-Quarter GDP Number Vindicate Bidenomics?
“US citizens will, in the event of an uncommonly strong third-quarter US GDP release, benefit from taking close note of political self-aggrandizement made in its wake. Upcoming GDP releases may require reminding administration officials of statements made tomorrow regarding the prospects of Bidenomics.” ~Peter C. Earle
-
•
Inflation Ticks Up Again. Keep an Eye on Oil
“Major changes in oil prices seem likely to drive the near-term changes in CPI inflation, both headline inflation and possibly core as well. Another big question is how the Fed will respond.” ~Thomas L. Hogan
-
•
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
-
•
Worst US Bond Selloff Since 1792
“The failure of numerous banks at once can damage the economy, as bank failure waves did during the Great Depression, the Savings and Loan crisis in the 1980s, and the 2007-10 meltdown.” ~Robert E. Wright
-
•
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
-
•
Wishful (Protectionist) Thinking
“Specialization and productivity increase when the market’s size extends across national borders. But tariffs reduce the extent of the market and thereby reduce specialization.” ~Paul Mueller