March 8, 2018

The Fed makes-up reasons to justify their preferred actions

In her recent speech, Lael Brainard ends with the punchline: In many respects, the macro environment today is the mirror image of the environment we confronted a couple of years ago. In the earlier period, strong headwinds sapped the momentum of the recovery and weighed down the path of policy. Today, with headwinds shifting to tailwinds, the reverse could hold true. The charts indicate that there have been several instances of “mirror images” over the last 8 years. The latest  “cycle” is characterized by the strongest headwind and the weakest tailwind. That becomes more evident when you see that real… Read More