Sound Money Project
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Without Rules, the Fed Rules
“Committing to a rule significantly lowers the cost of evaluating Fed policy. And lowering the cost of evaluating Fed policy could make it very clear to a great many people that the Fed is up to no good.” ~ Alexander W. Salter
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Dollarization and the Lender of Last Resort
“Typically, there is little risk of losing a lender of last resort in countries with troubled currencies that are considering dollarization because such countries don’t have a lender of last resort to lose.” ~ Nicolas Cachanosky
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What’s the Harm in Raising the Inflation Target?
“In addition to increasing workers’ real tax burden, raising the inflation target reduces workers’ real wages by reducing the demand for their labor services.” ~ Bryan Cutsinger
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Monetary Policy Remains Sufficiently Tight
“There’s no returning to the pre-pandemic trend for the price level. We’re left with permanently higher prices. Hopefully, the Fed continues to bring inflation down gradually.” ~ Alexander W. Salter
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The Floor System Fails
“During normal times, when inflation is low and stable, the floor system increases the burden on taxpayers. The burden is even larger when inflation is high, as it has been over the past two years.” ~ Louis Rouanet
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Why Are Mortgage Rates So High?
“Interest rates on mortgages were 2.66 percent just two and a half years ago. Why the sudden increase in rates? The Federal Reserve increased the money supply and generated the worst inflation in many years.” ~ Gerald P. Dwyer
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Against a 3 Percent Inflation Target
“If the Fed can really make such an elementary error and get away with it, a major prudential reason for keeping it around would no longer hold.” ~ Alexander W. Salter
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Inflation is Back on Target
“People have renegotiated their wages and purchase orders with those new expectations in mind. To course correct at this late stage would amount to a very painful contraction.” ~ William J. Luther
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The Costly Late Arrival of FedNow
“Policy makers should ensure that the US payment landscape is efficient, accessible, and beneficial for all stakeholders involved with as little government involvement as possible.” ~ Nicolas Cachanosky
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Whipped Inflation Now
“The battle for 2 percent inflation has already been won. Fed officials should acknowledge and celebrate the victory.” ~ William J. Luther
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•
Without Rules, the Fed Rules
“Committing to a rule significantly lowers the cost of evaluating Fed policy. And lowering the cost of evaluating Fed policy could make it very clear to a great many people that the Fed is up to no good.” ~ Alexander W. Salter
-
•
Dollarization and the Lender of Last Resort
“Typically, there is little risk of losing a lender of last resort in countries with troubled currencies that are considering dollarization because such countries don’t have a lender of last resort to lose.” ~ Nicolas Cachanosky
-
•
What’s the Harm in Raising the Inflation Target?
“In addition to increasing workers’ real tax burden, raising the inflation target reduces workers’ real wages by reducing the demand for their labor services.” ~ Bryan Cutsinger
-
•
Monetary Policy Remains Sufficiently Tight
“There’s no returning to the pre-pandemic trend for the price level. We’re left with permanently higher prices. Hopefully, the Fed continues to bring inflation down gradually.” ~ Alexander W. Salter
-
•
The Floor System Fails
“During normal times, when inflation is low and stable, the floor system increases the burden on taxpayers. The burden is even larger when inflation is high, as it has been over the past two years.” ~ Louis Rouanet
-
•
Why Are Mortgage Rates So High?
“Interest rates on mortgages were 2.66 percent just two and a half years ago. Why the sudden increase in rates? The Federal Reserve increased the money supply and generated the worst inflation in many years.” ~ Gerald P. Dwyer
-
•
Against a 3 Percent Inflation Target
“If the Fed can really make such an elementary error and get away with it, a major prudential reason for keeping it around would no longer hold.” ~ Alexander W. Salter
-
•
Inflation is Back on Target
“People have renegotiated their wages and purchase orders with those new expectations in mind. To course correct at this late stage would amount to a very painful contraction.” ~ William J. Luther
-
•
The Costly Late Arrival of FedNow
“Policy makers should ensure that the US payment landscape is efficient, accessible, and beneficial for all stakeholders involved with as little government involvement as possible.” ~ Nicolas Cachanosky
-
•
Whipped Inflation Now
“The battle for 2 percent inflation has already been won. Fed officials should acknowledge and celebrate the victory.” ~ William J. Luther