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
Archive for the ‘Federal Reserve’ Category
My favorite remaining institutions: the justice system and the Fed
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
Clashing with the Fed: Should they stay or should they go?
Should the Fed raise their benchmark interest rate at their meeting later this month? As of this morning, financial markets put the likelihood of a March rate hike of another 25 basis points at 77.5 percent. That’s about twice what it was a few weeks ago, but since then, many Fed heads have suggested such… Read more
Inflation?! We ain’t got no stinkin’ inflation!
This morning’s update to the GDP report from last quarter showed that the Fed’s preferred inflation gauge, the core PCE deflator, rose at an annual rate of only 1.2 percent in 2016Q4. Seasoned economists know that the technical term for such an increase is bupkis. Now, OTE’ers know that I’m always going on about boosting… Read more
Slack, inflation, and the Fed
What with Chair Yellen testifying in Congress over the last couple of days, I’ve been trying to dig into the case for forthcoming Fed rate hikes. Clearly, there is more price pressure in the system than in recent months, but there are also these factors to consider: –The data-driven case for rate hikes is far… Read more