Progressives’ Keynesian economist in chief, Paul Krugman, has been second to none in calling out policymakers’ focus on reducing budget deficits when economies were still weak (also known as “austerity”). Given that record, his oped in today’s NYT may surprise some readers. He argued that, as the economy closes in on full employment, fiscal budget… Read more
Archive for the ‘Federal Reserve’ Category
The elusive u*
‘u*’ is econo-shorthand for the so-called “natural rate” of unemployment, or the lowest unemployment rate consistent with stable inflation. The problem is, as I explore over at WaPo today, it’s an unobserved variable that is increasingly hard to pin down. That makes it an…um…imperfect yardstick for Fed policy.
Kudlow for CEA?
A few people have asked me about the rumored pick of CNBC host Larry Kudlow to head the Council of Economic Advisers in the incoming Trump administration (I’m never sure if that’s supposed to be an ‘e’ or an ‘o’ in Advis_rs; the WaPo piece just cited has ‘o’ in the headline and ‘e’ in… Read more
In advance of the Fed’s announcement on rates tomorrow…
The Fed started its December meeting today, one in which they are highly likely to decide it’s time for another rate hike. Prediction markets are posting a 95 percent probability that the Fed lifts their benchmark interest rate tomorrow from a target range of 0.25-0.50 basis points (hundredths of a percent) to 0.50-0.75. I’m confident… Read more
Don’t forget factor shares, the Fed’s balance sheet, and a bunch of other reasons to discount inflationary fears
I’ve written very little about the Fed in recent weeks, in part because there’s this other thing going on, but more because I don’t have much to say that isn’t being amply said elsewhere. But it’s not even 9am yet and I’ve already bumped into a number of Fed-related arguments that seem worth weighing in… Read more