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The FOMC thinks it´s coaching a “major league” economy

In a recent speech, Loretta Mester gave the impression the FOMC is dealing with a “robust or major league” economy. Excerpts from her speech, where the highlighted “descriptions” convey that view follows. She´s not alone. On the same day, San Francisco Fed president John Williams said: “Now that we’ve gotten the monkey of the recession off
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Wolfgang Schauble - the most dangerous politician in Europe

For all the column inches spilled on Le Pen, Farage, AfD, Willders, etc. etc. by far the most dangerous politician in Europe is the one who has both huge influence and completely wrong-headed ideas about monetary policy. That man is Wolfgang Schauble, Germany’s long-standing and powerful Finance Minister. At the fringes of last week’s IMF
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Did That Canary Just Topple Over?

Over at the always-trenchant Idiosyncratic Whisk, blogger Kevin Erdmann has again parsed the U.S. CPI release, and finds that shelter costs (as measured) are suddenly cooling. Of course, one month does not a trend make. But then we have indices that show that U.S.  commercial property values topped out last August. Yes, the last time
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A Fed engineered Ice-Age

In The Economy May Be Stuck in a Near-Zero World, Justin Wolfers posits: If the Fed can’t cut rates as much as required to fight a slowing economy, then recessions will become more common and more painful. It suggests an urgent need to reconsider how we will counter the next bout of bad economic news,
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Stop talking about productivity

“I cannot forecast to you the action of Russia. It is a riddle, wrapped in a mystery, inside an enigma; but perhaps there is a key. That key is Russian national interest.” So said Winston Churchill. A variant might be: “I cannot forecast to you the growth in productivity. It is a riddle, wrapped in a
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Misreading the tea-leafs

Federal Reserve Chair Janet Yellen said the primary reason for raising interest rates in March was a simple one: the central bank is confident in a steadily improving economy. The economy, however, has not really been improving lately, it has actually been deteriorating somewhat. Despite rallies in stocks and renewed optimism among business leaders and
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Stop Talking About Unemployment

Scott Sumner wrote an interesting blog post on his vision of macro. It is a useful way of seeing where Scott stands today. However, we were puzzled. Should unemployment really be the centerpiece variable or should it be stable nominal spending growth at an appropriate level? It seems to us that “unemployment” is a very flaky variable.
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