Young people today hear over and over again that they need to attend college to be successful. But they also hear student debt has become such a problem that President Biden sees fit to cancel at least $870 billion of it by executive fiat. Unsurprisingly, this creates an apparent paradox: if college is such a good deal, why do so many people ...

WASHINGTON, DC – The current debate about generative AI focuses disproportionately on the disruption it might unleash. While it is true technological advances always disrupt legacy industries and existing systems and processes, one must not ignore the opportunities they can create or the risks they can mitigate. Pessimism suffuses ...

Although inflation remains high,disinflation continued in April. The Bureau of Labor Statistics reported the Consumer Price Index (CPI) increased 0.3 percent last month, for a year-over-year change of 3.4 percent. The Core CPI, which excludes volatile food and energy prices, also rose 0.3 percent on the month and 3.6 percent year-over-year. On ...

Price controls lead to the misallocation of resources, shortages, diminished product quality, and black markets. Prices are threads stitching together the fabric of our economy. They guide countless producers, here and abroad, to meet the most urgent demands of countless consumers. Prices enable the economic coordination of millions ...

Current international tensions are concerning for markets but not unprecedented. Geopolitical pressures have posed unrelenting challenges for the global economy in recent years. Activity has been restrained by the Russia-Ukraine war, hostilities in the Middle East, and ongoing tensions between the US and China. In tandem, populist ...

The AIER Everyday Price Index rose for a fifth consecutive month in April 2024. The 0.59 percent increase brings our proprietary inflation measure to 290.9. AIER Everyday Price Index vs. US Consumer Price Index (NSA, 1987 = 100)

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Cleveland Fed President Says Need to See Progress on Sticky Services Prices. Welcome to Central Bank Central. I'm Kathleen Hays. I am here today at the Federal Reserve Bank of Cleveland with a very special guest. They don't come much more special than the president of Cleveland Fed. And of course, I'm referring to Loretta Mester, someone I ...

Some critics of the Federal Reserve argue that central bankers manipulate the market whenever they adjust interest rates. For example, in an article in the Wall Street Journal, monetary economist Judy Shelton writes, "When the Fed tightens by raising interest rates, its goal is to increase borrowing costs." She contends that the Fed's approach ...

Jerome H. Powell, the Federal Reserve chair, reiterated Tuesday that policymakers were poised to hold interest rates steady at a high level as they waited for evidence that inflation is slowing further. Fed officials entered 2024 expecting to make interest rate cuts, having lifted borrowing costs sharply to a more than two-decade high of ...

Washington has several options if public debt skyrockets, but none of them are compelling. The U.S. economy has confounded forecasters’ dour predictions, but not the optimism of financial markets. A recession appears less likely as businesses keep adding jobs. Labor markets are absorbing more immigrants without threatening native-born ...

Producer price index data out Tuesday showed that inflation ran hotter in April, but downward revisions to earlier data assuaged concerns. Meanwhile, health care prices, the biggest input to the Federal Reserve's primary core inflation rate, moderated a bit as airfares fell. After the PPI data, the S&P 500 edged higher in morning stock ...

‘We’re just going to have to see where the inflation data fall out,’ says central bank leader. Federal Reserve Chair Jerome Powell affirmed the central bank’s plans to hold interest rates at the highest level in more than two decades as it awaits evidence that a slowdown in inflation will resume after setbacks this year. Powell said he ...

If borrowing costs remain elevated, there will be greater downside risk for investments. But it's not all bad. Our holiday from history has come to an end. I am referring not to world peace but to the zero-interest-rate environment so many people expected would last forever. Despite all the talk about when the US Federal Reserve will cut rates ...

The Fed could simply stop blocking run-proof banks from emerging. But that would take political will. There was a financial crisis in 2008. The U.S. government responded with bailouts. If people know they will be bailed out in the next crisis, they take too much risk. Recognizing this danger, the government vastly expanded financial ...

Former K.C. Fed Chief Says Transparency Not Same as Clarity. Welcome to Central Bank Central. I'm Kathleen Hays, a very special edition of Central Bank Central. I'm at the Federal Reserve Bank of Cleveland, a very important conference today. Central Bank challenges on communication, theory and practice. Loretta Mester has been president of the, ...

Universities depend on taxpayer money to survive, and they are wasting those funds. In America today, there are three interlocking crises that may finally collapse “Big Ed”, the nation’s dysfunctional higher education cartel. The latest headlines focus on moral collapse, as campuses that aggressively policed so-called microaggressions now ...

As of Monday, May 13, there have been 1,148 rules and regulations finalized among the 41,830 pages published to date in the 2024 Federal Register. Law, Rules, Standards, Agreement, Contractgetty Page tallies of over 800 per day have suddenly become routine. Last week's 4,225 pages represented nearly double 2024's weekly pace so far. At any ...

ISTANBUL – The dollar's strength, particularly against major Asian currencies, has triggered a wave of skittishness in financial markets. Can anything be done to stem the greenback's rise, and even if something can be done, should it? The dollar has strengthened sharply in recent months, against Asian currencies in particular. A rising ...

Fuel efficiency and green initiatives haven’t slaked the world’s thirst for crude. Like clockwork, the commodities market worries in May about the strength of oil demand heading into the northern hemisphere summer holiday. Nervousness about the seasonal pickup in oil consumption abounds. It happened in 2023, and it’s happening again this year. ...

Inflation in the U.S., Europe, and the UK has fallen from very high levels but remains above the central banks' goals of 2%. Following the Fed's, Bank of England's (BoE's) and European Central Bank's (ECB's) painful experiences of failing to forecast their higher inflations and then being forced to raise rates aggressively, they look forward ...

The week ahead is jampacked with economic indicator releases. The big ones are for inflation, retail sales, and production. They may be somewhat stagflationary on balance, showing inflation remains too high while economic growth is slowing. Nevertheless, we still expect to see inflation moderate with solid economic growth over the rest of ...

What would happen to Apple, Google, and Nvidia if the State of California defaulted on its debt? It's not an unrealistic question given the state's occasional fiscal lapses, plus the question becomes more reasonable in light of the size of California's economy: if it were a country it would be the fourth largest economy in the world. In which ...

It was a winning week for equities and fixed income. The common factor behind the rally was the second signal in less than a week that the US economy is slowing. The employment report for April released on May 3 recorded job creation of only 175,000, far less than had been anticipated. The increase in the unemployment rate from 3.8% in March ...

The average annual inflation rate during his Presidency is 5.5%. Under Trump it was 1.9%. Democrats and the press keep telling Americans that they don’t know how good they have it. The U.S. economy is great, Bidenomics is the reason, and don’t worry, be happy. Yet the voters, those numbskulls, keep telling pollsters they don’t feel the boom ...

Hoover Paper Puts Coming Fed Framework Review in Spotlight. Welcome to Central Bank Central. I'm Kathleen Hays. We're going to take a look at the Federal Reserve. What a surprise on Central Bank Central. But, you know, as the debate rages on over what the Federal Reserve should and will do on its interest rate path this year, there's a ...

States and cities spend billions on housing projects that are costly, cumbersome to build, and won’t solve the affordability crisis. For the last two years, many potential American homebuyers have found themselves priced out of the market. Soaring interest rates and prices for construction materials, along with a sharp decline in supply from ...

Unemployment claims surged this week, suggesting the economy, and the jobs market, is weakening. The question is: Will growth slow, or is the economy about to fall off a cliff? Will there be a soft landing or a recession? Americans continue to give President Biden low marks on the economy, despite incessant assurances from the White House ...

California has just 72 percent of the assets needed to make payments to retired public workers, many of whom get to collect six-figure annual payments. When arguing about whether the Treasury needed to take urgent action to deal with soaring federal debt in the 1980s, the late former chairman of the Council of Economic Advisers Herb Stein ...

The end of the historic bull market in the asset class just means a different approach is needed from investors. With the end of the bond market’s historic bull run, is it all over for a particular type of active bond manager — those who pursue returns unconstrained by market benchmarks? Investor Bill Gross certainly thinks so. He penned one ...

One of our competitors claims that we are in a recession. Another claims that we will soon be in a recession. The most widely anticipated recession of all times is turning into the longest widely anticipated recession of all times. One day, the diehard hard-landers will be right. Was today the day? We're sure that their heartbeats quickened ...

With no authorization from Congress, the bank regulator tries to suppress these innovative firms. Congress created the Federal Deposit Insurance Corp. during the Great Depression to protect Americans’ hard-earned money and restore confidence in the financial system. Today the FDIC regulates more than 5,000 banks for safety and soundness, ...

As expected, the Federal Reserve left interest rates unchanged at its meeting last Wednesday. That's because of a mix of good news and bad news. The good news is that the economy has been growing more briskly than most analysts expected (though April's jobs report came in slightly softer than expected). The bad news is that the stronger growth ...

Private unions have every right to exist, but that doesn't mean they're actually beneficial on net. Unions are said to be having a moment. The story goes something like this: Helped by a presidential administration that touts itself as the "most pro-union in history," labor unions–after decades of decline–are winning big victories ...

This is part of a series ‘Economists Exchange’, featuring conversations between top FT commentators and leading economists The economist on the mis-steps of the Fed over interest rates and the markets. Few economists have a curve named after themselves. One of the exceptions, Arthur Laffer, is best known for the moment in 1974 when he drew a ...

Former president Donald Trump's criminal trial in Florida for allegedly mishandling classified documents is being postponed indefinitely. Trump-appointed judge Aileen Cannon ordered a new pretrial schedule for motions and discovery Tuesday afternoon after the classified documents case was originally scheduled to go to trial later this month. ...

Since just before the pandemic during January 2020 through March of this year, the CPI indexes for new autos, auto maintenance & repairs, and auto insurance are up 21.0%, 34.8%, and 44.6% (chart). These all exceed the 20.6% increase in the headline CPI over this period. Why?Americans are buying lots more expensive light trucks than passenger ...

The hype, and the reality, about the energy transition in 10 charts. Over the past few days, I’ve searched the NewsBank archive for uses of “energy transition.” One of the earliest uses of that now-ubiquitous phrase occurred in the Christian Science Monitor in 1981. In a dispatch from Nairobi, a reporter named Richard Critchfield explained ...

Investor Stanley Druckenmiller on Bidenomics: "If I were a professor, I'd give them an 'F'." pic.twitter.com/WfsU4ecO6y– Squawk Box (@SquawkCNBC) May 7, 2024 Billionaire investor Stanley Druckenmiller on Tuesday blasted the Treasury and Federal Reserve for failing to slow inflation and said his overall grade of "Bidenomics" would be "F" during ...

Higher interest rates are actually healthy for stocks and the economy. For too long, U.S. Federal Reserve policymakers have focused on when interest rates could be lowered to avoid a recession. Instead, economic growth and stock values over the long term would be better supported by letting markets take rates higher. The consensus among ...

So why stop recovering those funds for the truly needy? More than a dozen members of the House of Representatives have introduced legislation that would increase federal Medicaid spending by ending estate recoveries. The proposal, which was discussed at an Energy and Commerce Committee legislative hearing on April 30, would let individuals ...

A book that offers up the weighty observations of leading economists, academics, and policymakers on the highly topical subject of monetary policy should rightfully be a runaway bestseller. The trick, though, is to make the discussion not only relevant for readers, but engaging and motivating. While Americans are plenty focused on ...

Real victories are possible when we focus on solutions instead of grievances. What comes after diversity, equity, and inclusion ? Hundreds of DEI programs are now falling out of favor across America. Far too many of those leading efforts to correct course have been satisfied with simply rolling back problematic policies and legislation. ...

It's slim pickings this week on the US economic front. The news is mostly about credit conditions. Then again, earnings reporting season isn't over. And, we can always count on the members of the Federal Open Mouth Committee to make headlines now that their blackout period is over. Here is what we can expect from this week's credit ...

"You have to reroute all of our coffee immediately." Those were the words of Michael Haft, co-founder of Washington, D.C.-based Compass Coffee. It gets its coffee beans from the Port of Baltimore. Of course, to say that Compass gets its shipments of beans from north of D.C. simplifies what is complicated and brilliant by many, many miles. As ...

Powell Presser Shows Little Concern on Inflation Uptick. There are two main ways of confronting adverse developments. The first is to face them frontally and deal with the consequences. The second is to act as if nothing significant happened. Federal Reserve Chairman Jerome Powell's press conference Wednesday was a classic case of the ...

Fed Chair Powell has announced the Fed will conduct a strategic review of monetary policy later this year. This article, co-written by Mickey D. Levy and Charles I. Plosser, focuses on the characteristics and failures of the strategic framework that the Fed adopted in 2020 and how this framework contributed to monetary policy mistakes and ...

The April jobs report showed that hiring moderately undershot expectations, as employers added 175,000 payroll positions, while the unemployment rate edged higher. After the jobs report, the S&P 500 extended overnight gains as Wall Street weighed its impact for Fed rate cuts. The jobs report's soft tone was echoed by the Institute for ...

A book published 44 years ago on the future of the US economy turns out to be both incorrect and reassuring. Sometimes the best way to understand the future is to look to the past. Out of curiosity, I recently cracked open The American Economy in Transition, published in 1980, edited by Martin Feldstein and including contributions from ...

Former St. Louis Fed President Does Not See Need for Rate Hike. Welcome to Central Bank Central. I'm Kathleen Hays. Well, here we are, the countdown to the Hoover Institution at Stanford University's annual big monetary policy conference. In fact, I'd have to say the last three or four years, it's gotten even bigger after what the Federal ...

Led by a perhaps surprising jump in aviation exports and strong automotive imports, U.S. trade is running at a record rate this year, according to U.S. Census Bureau data released Thursday. Barely. U.S. trade totaled $1.26 trillion through March, an uptick of 0.48%. Exports are down 0.31% while imports increased 1.02%. Exports, while down ...