Part two of a two-part series. There were big price shifts up and down in August, making it difficult to pick up a clear signal about inflation. However, if consumers…
What Would Paul Volcker Do?
Part one of a two-part series. Interest rates have been near zero for the past 15 years, except for a brief period when they rose as high as 2½%. That’s…
Unaffordable Housing: Part Two
Part two of a two-part series. For three years during the Trump Administration, the Fed modestly raised interest rates, but it changed direction when the pandemic and the accompanying lockdown…
$6 Trillion and Counting
Part two of a two-part series. When the economy is fully recovered, the Fed’s zero interest rate policy (ZIRP) will need to continue to support the Biden Administration’s record spending.…
Easy Money Is No Longer Easy
Part one of a two-part series. It took nearly a decade for the Federal Reserve Board to reach its inflation target of 2%. Now that the target has been not…
The Fed Is Running Out of Money
Part two of a two-part series on the repo market. So the Federal Reserve Board buys bonds, creating trillions in cash, which it then pays interest on to banks, who…
Mismeasuring Inflation
Part two of a two-part series on the Fed’s approach to inflation. In our last post we noted the Federal Reserve Board’s obsession with trying to achieve 2% inflation. Not…
If You Think Inflation Is Too Low, You Must Be an Economist
Part one of a two-part series on the Fed’s approach to inflation. Part two will appear next week. There’s probably not a consumer in America who worries about prices being…
Modern Monetary Theory – Deficit Thinking
If you think Greece should serve as an economic model for the United States, you’ll love modern monetary theory (MMT). MMT advocates like Congresswoman Alexandria Ocasio-Cortez (AOC) (need I say…
Back to ZIRP?
During the Obama Administration, the Federal Reserve Board held interest rates close to zero for seven years. The economy stagnated. But now, with the benchmark federal funds rate at 2.25%…