Archive for the ‘Federal Reserve’ Category

Is the Fed fighting an old war?

June 15th, 2017

As expected, as their meeting concluded yesterday, Federal Reserve Chair Janet Yellen and company decided to raise the benchmark interest rate they control by one-quarter of a percentage point. The question is: why? She was, of course, asked about this in lots of different ways in her press conference. [Pause here for a moment and… Read more

Jobs report: Some softening in May. Should the Fed hold off on next rate hike? I say…[read on]

June 2nd, 2017

Employers added only 138,000 jobs last month, well below expectations for 175,000. Revisions to payrolls for the prior two months reduced employment gains by 66,000. The unemployment rate fell to 4.3 percent, its lowest level since 2001, but for the wrong reason: labor force participation fell by two-tenths of a percent. In other words, this… Read more

Inflation, earnings, and spending: a review of recent trends

May 4th, 2017

I need a serious break from the ugliness of DC health-care politics, so let’s talk about three interesting and related economic questions: inflation, labor demand, and consumer spending. First, why does inflation continue to respond so weakly, if at all, to the tightening job market? The traditional response is “because the Phillips curve (the relationship… Read more

Dynamic scoring, interest rates, and “crowd out”

April 25th, 2017

I’ve got a piece over at the WaPo on why, when Treasury Sec’y Mnuchin says that Trump’s tax plan–which I suspect does not exist yet outside of some broad principles–“will pay for itself,” you should…um…disbelieve him. Such claims abuse “dynamic scoring,” the process by which analysts estimate macroeconomic feedback effects from tax cuts. I provide a… Read more

My favorite remaining institutions: the justice system and the Fed

March 16th, 2017

There are at least two American institutions that remain venerable, albeit vulnerable: the justice system and the Federal Reserve. On my way in this morning, I learned some details about the Hawaiian judge’s rejection of President Trump’s travel ban v2.0. While team Trump believed they’d removed the problematic language from their first run at this… Read more