A very subtle distinction
It will be easier to understand this post if you first read the previous post. The Fed delivered two monetary shocks today. The first occurred at 2:15pm, and caused yields on 2 and 5 -year bonds to...
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What’s the problem?
The problem isn’t the recent decline in equity prices; the stock market tends to be more volatile than the underlying economy. Nor is it the recent increase in the fed funds rates (2.4% isn’t very...
View ArticleWhat should we expect from Fed officials?
I occasionally see comments from people who have an unrealistic set of expectations for Fed officials. An institution like the Fed will tend to reflect the consensus view of economists. Back in late...
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What if cherry pie could cure cancer?
[After reading this post, please check out my related Econlog post, an increasingly rare example (for me) of a post where I discuss a NEW IDEA for monetary policy. At least new to me.] Imagine a world...
View ArticleMy views on monetary policy: An update
It’s time to update my current preferences on monetary policy: Monetary authority structure: 1. As in the UK, monetary policy decisions should be made by a committee of monetary specialists. They...
View ArticleKocherlakota wins 2013 (and Powell loses)
The minutes for 2013 were just released, and I’ve only had time to consider the January transcript. It’s clear that Narayana Kocherlakota is the clear winner. Most people will focus on the fact that...
View ArticleWhen should we be worried about monetary policy?
During late December, there was a lot of chatter in the press and the blogosphere about monetary policy. Many pundits expressed concern that policy was off course. Back in September 2010, there was...
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The actual problem
The global media seems endlessly fascinated by the question of whether monetary policy in the US is too easy or too tight, even as the Fed comes amazingly close to hitting its targets. I suppose this...
View ArticleExplaining Fed accountability
I frequently get questions about my recent proposal to increase Fed accountability and transparency. Thus I thought it might be useful to make another attempt to explain the idea, based on some of the...
View ArticleLike an ox
Six years ago, I wrote a post that reflected my view of the proper relationship between the Fed and the markets: That’s not Bullard’s job. He hasn’t been hired to outguess the markets. If he wants to...
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