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Mark Mills: The Energy to Prevent and Prosecute Wars
Posted: March 17, 2024 at 08:39 PM (Sunday)

A generation of anti-hydrocarbon policies has crippled Europe’s defense capabilities. Whatever one thinks about its causes, course, and consequences, the war in Ukraine rages on. That unavoidable fact has brought many in Europe to something of an epiphany. In late February, at a summit of European leaders in Paris, French president Emmanuel ...


Judy Shelton: Don’t Credit the Fed for Inflation’s Decline
Posted: March 17, 2024 at 12:17 PM (Sunday)

The central bank failed to constrain economic growth. As supply increased, price increases eased. It has been two years since the Federal Reserve began its pivot from near-zero interest rates in March 2022 to its current target range of 5.25% to 5.5%. The rate hikes surged as inflation hit 9.1% in June 2022, but inflation has since settled down ...


John Tamny: Central Banks Neither Own Debt Nor 'Print Money’ To Buy It
Posted: March 17, 2024 at 10:00 AM (Sunday)

It's popular among the conspiracy-minded and central bank-obsessed (frequently the two go together) to suggest that governments establish central banks to buy their debt. The very notion is self-discrediting. How could a creation of government serve as the financier of same? How indeed. The answer here is that central banks neither own debt ...


Komal Sri-Kumar: Inflation: Trap of Fed's Own Making - Basing Policy on "Causa Falsa" Will Do It!
Posted: March 16, 2024 at 09:31 AM (Saturday)

Poor Jerome Powell! Within a week of his testimony before the Senate Banking Committee that we are "not far" from getting the confidence to start cutting interest rates, new inflation data released by the US Bureau of Labor Statistics on Tuesday (here) and Thursday (here) undercut him. It must be a painful lesson for the Federal Reserve to ...


J. Bradford DeLong: The Mystery of US Interest Rates
Posted: March 14, 2024 at 11:20 AM (Thursday)

BERKELEY – The near-consensus since the start of the pandemic has been that there are powerful fundamental factors keeping the neutral interest rate very low, and that there have been no major changes to those fundamentals. Why, then, is the long-term real safe interest rate so far above the neutral level? In the United States, the long-term ...


Alexander William Salter: Inflation Remains Elevated. Is Money Actually Tight?
Posted: March 13, 2024 at 10:42 AM (Wednesday)

There's been another bump in the disinflationary road. The Bureau of Labor Statistics announced the Consumer Price Index (CPI) increased 0.4 percent in February and 3.2 percent year-over-year, exceeding many economists' predictions. That's up slightly from January's 0.3-percent monthly and 3.1-percent ...


Jed-Graham: Hot CPI Inflation Won't Hurt Fed Rate-Cut Hope
Posted: March 12, 2024 at 04:02 PM (Tuesday)

Consumer price index data for February showed that core inflation ran hotter than expected last month, but services inflation moderated after heating up in January. The S&P 500 rose strongly in Tuesday stock market action after the CPI inflation data, as markets weighed the implications for the Fed rate-cut outlook.
CPI Inflation Report Hits ...


Allison Schrager: What the US Economy Needs Is a Cheap Date
Posted: March 11, 2024 at 12:00 PM (Monday)

Before the pandemic, eating out was an affordable luxury. Now it has become expensive, and a lot of Americans are feeling the strain. Please indulge me in some taxi-driver reporting (or, in this case, ride-share driver reporting): A few months ago, traveling in a city cheaper than New York, my driver told me that he and his wife had a weekly ...


John Tamny: The Federal Reserve’s Challenge Is Economists, Not Too Much Growth
Posted: March 10, 2024 at 10:00 AM (Sunday)

"The economy is looking up, and that's a challenge for the Federal Reserve." Those are the words of Hoover Institution visiting scholar Mickey Levy. We must be a really rich country, or something like that… Too many people working and too many businesses prospering is a challenge? The answer to the above question is that prosperity is a problem ...


Komal Sri-Kumar: Do Markets Need Powell's Cheerleading?
Posted: March 9, 2024 at 09:12 AM (Saturday)

Latest Promise: "Not Far" From Rate Cuts! The US Federal Reserve under Jerome Powell's leadership has shown repeated tendency to undercut its mandate on inflation by providing dovish messages. When the gentler tone turns out to have adverse consequences, officials abruptly shift stance with no sign that any lesson was learned. It happened ...


John Goodman: What’s Wrong With The U.S. Welfare State?
Posted: March 7, 2024 at 11:34 AM (Thursday)

Here are two surprising facts about welfare and poverty in the United States: (1) we are spending an enormous amount of money on people at the bottom of the income ladder and 2) all that spending does a very poor job of meeting human needs. And here is a surprising opportunity: if we took all of the money we are currently spending on ...


Alexander William Salter: Faster Growth and Interest Rates: Even Harder than You Think
Posted: March 7, 2024 at 06:00 AM (Thursday)

Writing in the Wall Street Journal, Mickey Levy opines that a stronger economy, fueled by productivity growth, might cause problems for the Federal Reserve. Levy, who is a member of the Shadow Open Market Committee, identifies the central bank's difficult task: "adjusting monetary policy to reflect the higher real interest rates that ...


Brian Blase: Correcting The Record On The Affordable Care Act
Posted: March 5, 2024 at 07:53 AM (Tuesday)

On March 1, I was asked to participate on a panel at the American Enterprise Institute on the Affordable Care Act. The panel was covered live on C-SPAN, and below are my slightly edited remarks. The Affordable Care Act – Industry Benefits and Deficits Soar Here is the big takeaway: the ACA in 2024 is largely the law that the health care ...


Kevin Hassett and Cale Clingenpeel: Has Inflation Received a Technical Knockout?
Posted: March 5, 2024 at 06:30 AM (Tuesday)

The answer depends on two words: residual seasonality. Data released last week confirmed that January inflation was hotter than it was meant to be at this stage, according to the Federal Reserve's preferred inflation gauge, the Personal Consumption Expenditures (PCE) price index. Despite that, a growing chorus attributes the flames to ...


Thomas Hogan: Fed Admits It Was Wrong – Kind Of
Posted: March 5, 2024 at 06:00 AM (Tuesday)

During the pandemic recovery, inflation reached the highest rates in 40 years, largely driven by the Federal Reserve's excessive monetary policy. The Fed got "behind the curve" by not raising its interest rate target fast enough, even once it became apparent its own policy was to blame. While some officials are reluctant to accept it, Fed ...


Christopher Rufo: Giving DEI the Pink Slip
Posted: March 4, 2024 at 03:26 PM (Monday)

Major institutions have started rolling back their diversity bureaucracies. Last year, conservatives began taking action against the "diversity, equity, and inclusion" bureaucracy. The Manhattan Institute released a model policy to abolish DEI, exposed abuses in public universities, and advised political leaders, most notably Florida governor ...


Clive Crook: Does Interest Rate Pain Explain the Consumer Sentiment Gap?
Posted: March 4, 2024 at 07:00 AM (Monday)

Consumers consider the cost of money part of their cost of living, but most calculations of inflation don’t factor in the impact of changes in interest rates. The apparent disconnect between the state of the US economy and voters’ perceptions of it has puzzled economists for months. Unemployment is low, inflation has come way down and real ...


Sally Pipes: Competition Or Insolvency? Medicare's Time For Choosing.
Posted: March 4, 2024 at 06:00 AM (Monday)

America has a spending problem. Last month, the Congressional Budget Office reported that debt held by the public will exceed the entire economic output of the country next year. Within ten years, the debt will reach 116% of GDP–"an amount greater than at any point in the nation's history," as the CBO put it. Remarking on these figures, ...


Peter Earle: Wendy’s Won’t Use Dynamic Pricing – But Should They?
Posted: March 4, 2024 at 06:00 AM (Monday)

"They're dead to me," was the reaction of one friend when he learned of the plan, now characterized as an alleged plan, to introduce Uber-style surge pricing to Wendy's fast food restaurants. No sooner did I begin writing this article (including the following line: "Given the initial reaction, it's possible that the Wendy's surge pricing plan ...


Tyler Cowen: Has Bidenomics Worked? It's Too Soon to Say
Posted: March 4, 2024 at 05:00 AM (Monday)

The president’s economic policies are certainly ambitious, but it will be many years before we know whether they’re successful. With the US economy booming, the job market growing and inflation retreating, the consensus is near-unanimous: Bidenomics has been vindicated. Allow me to offer a somewhat more skeptical perspective: Not that ...


Kenneth Rogoff: What’s Behind the US Stock-Market Disconnect?
Posted: March 4, 2024 at 04:51 AM (Monday)

CAMBRIDGE – But given the significant challenges and uncertainties facing the American economy regardless of who occupies the White House in 2025, there is little reason to believe that the current rally can last. There seems to be a bizarre disconnect between the surging US stock market and the sad state of American politics. Winston ...


Ed Yardeni: Market Call: Dalio's Bubble Trouble Meter
Posted: March 3, 2024 at 03:47 PM (Sunday)

In a February 29 LinkedIn post, Ray Dalio wrote that his bubble gauge for the overall stock market is at a mid-range reading of 52 (chart). He concluded that the stock market "doesn't look very bubbly." His meter is based on six inputs that signal whether speculative activity is too widespread. So it is currently indicating rational ...


Mickey Levy: The Fed’s Latest Problem: A Strong Economy
Posted: March 3, 2024 at 12:23 PM (Sunday)

Improving productivity and better-than-expected growth make it risky to cut interest rates too much. The economy is looking up, and that’s a challenge for the Federal Reserve. The pandemic shock prompted excessive monetary and fiscal responses, generating inflation. The Fed responded with aggressive rate hikes that reduced inflation within ...


John Tamny: Christopher Waller’s Inflation 'Prescience’ Didn’t Much Exceed Lawrence Summers’s
Posted: March 3, 2024 at 10:00 AM (Sunday)

The final Boeing 747 rolled off of the assembly line on December 6, 2022. Forever a legend, it's always worth mentioning that this marvel of aviation was a consequence of six million different parts produced around the world. Notable about the globalized nature of the 747's manufacture was that it was realistically a statement of the ...


Adam Millsap and Tedford Tyler: How Trade Can Help the U.S. Beat China
Posted: March 3, 2024 at 06:30 AM (Sunday)

More trade will enhance American power in the Indo-Pacific. Trade has fallen out of favor on the right and the left. Donald Trump and Joe Biden support tariffs and buy America policies that emphasize domestic production and impede global trade. Trade hurts our economy, they claim, and it undermines national security. Big if true, but they ...


Komal Sri-Kumar: Rate Cuts: Fed Talks With Many Voices
Posted: March 2, 2024 at 09:54 AM (Saturday)

Powell"s Cheerleading in December Remains A Problem. The Federal Reserve's favorite price measure, the Personal Consumption Expenditure index, was released for the month of January by the US Bureau of Economic Analysis (BEA) on Thursday, and was elevated as expected. However, both Treasury and equity holders were relieved that the figures were ...


Avik Roy: CMS’ Medicare Advantage Payment Cuts Come With Risks
Posted: March 1, 2024 at 10:58 AM (Friday)

There's a famous scene in Star Wars: A New Hope where Luke Skywalker, Han Solo and company are trapped in a garbage compactor on the Death Star. The walls of the compactor slowly squeeze in, threatening to flatten the protagonists before they can get out. Opponents of Medicare Advantage are hoping that the federal government will do ...


William Luther: Is Inflation on the Rise Again?
Posted: March 1, 2024 at 06:00 AM (Friday)

Inflation picked up in January, according to the latest data from the Bureau of Economic Analysis (BEA). The Personal Consumption Expenditures Price Index (PCEPI), which is the Federal Reserve's preferred measure of inflation, grew at a continuously compounding annual rate of 4.1 percent in the first month of the year. The PCEPI has grown at ...


Jeanna Smialek: Shrinkflation 101: The Economics of Smaller Groceries
Posted: March 1, 2024 at 05:02 AM (Friday)

Have you noticed your grocery products shrinking? Here’s how that gets counted — and what gets missed — in inflation data. Grocery store shoppers are noticing something amiss. Air-filled bags of chips. Shrunken soup cans. Diminished detergent packages. Companies are downsizing products without downsizing prices, and consumer posts from Reddit ...


Kathleen Hays: Hot Services Prices May Push Up Inflation, Hold Rate Cuts at Bay: Torres
Posted: February 29, 2024 at 04:46 PM (Thursday)

Easing Financial Conditions Blunt Fed Restrictiveness: Interactive Brokers Economist. Welcome to Central Bank Central. I'm Kathleen Hays. Today we're going to take an in-depth look at inflation, the latest numbers. We're also going to take a look at the bond market with my guest today who has much experience managing bonds, knowing where ...


Jeanna Smialek: A Key Inflation Measure Moderated in January
Posted: February 29, 2024 at 09:28 AM (Thursday)

The Federal Reserve’s preferred inflation measure continued to cool on an annual basis, even as a key monthly gauge nudged higher. A measure of inflation closely watched by the Federal Reserve continued to cool on an annual basis in January, the latest sign that price increases are coming back under control even as the economy continues to ...


Paul Vallas: Removing the Police from Chicago Schools Puts Students at Risk
Posted: February 29, 2024 at 06:30 AM (Thursday)

Chicago Public Schools recently suffered four shooting deaths. The reaction of city and school leaders? Remove police from city schools. Sorry. Wrong answer. Chicago Public Schools experienced three shootings near its schools that left four students dead during the last two weeks of January, so what is the Chicago Board of Education doing ...


Conor Sen: Need to Sell Your House? It’s Time to Hustle
Posted: February 29, 2024 at 05:00 AM (Thursday)

Sellers are finally giving up the wait, driving up inventory levels and handing negotiating power back to would-be buyers in many markets. If you need to sell your home in the next few months, I’d get on with it. As we enter the spring selling season, it’s becoming increasingly clear that the period during which sellers had the leverage in ...


Preston Cooper: Two Recent Reports Reveal The High Cost Of Degree Inflation
Posted: February 29, 2024 at 02:30 AM (Thursday)

A recent report shows that over half of college recent college graduates are working in jobs where they don't use their degrees. As if that weren't bad enough, such "underemployed" college graduates face massive salary penalties relative to their peers who work in college-level jobs. The data paint a troubling picture. Either colleges ...


Veronique de Rugy: The Economy Is Doing Way Better Than Many Believe
Posted: February 29, 2024 at 12:15 AM (Thursday)

Despite the popular narrative, Millennials have dramatically more wealth than Gen Xers had at the same age, and incomes continue to grow with each new generation. America is celebrated for its economic dynamism and ample and generously paid employment opportunities. It's a nation that attracts immigrants from around the world. Yet Americans ...


Ed Yardeni: Too Many Happy Bulldogs?
Posted: February 28, 2024 at 10:48 PM (Wednesday)

We have nothing to fear but nothing to fear. The Fed is done tightening. The economy is doing fine. Inflation is moderating. The stock market is hitting record highs. So what's wrong with this picture? Nothing other than it is the consensus view, and ours too. Today, there are lots of happy bulls, including us. We would be happier if there ...


Alexander William Salter: Congress Overspends, but the Fed Inflates
Posted: February 28, 2024 at 06:00 AM (Wednesday)

Writing in The American Conservative, Rep. Josh Brecheen (R-OK) recently blamed inflation on irresponsible fiscal policy. He cites a barrage of statistics on the magnitude of the national debt, the looming insolvency of Social Security and Medicare, and the burdens high prices create for American households. Rep. Brecheen is partly ...


Nick Timiraos: The Fed Governor Who Proved Larry Summers Wrong
Posted: February 28, 2024 at 05:30 AM (Wednesday)

Influence of Christopher Waller, a Trump appointee, rises as he challenges economic orthodoxy. Federal Reserve governor Christopher Waller laid out a novel economic framework two years ago showing how the central bank could bring inflation back to its 2% target without the usual jump in unemployment, stirring furious pushback from ...


Brian Blase: Much Larger Medicaid Program Likely A Lasting Effect From Pandemic
Posted: February 27, 2024 at 08:06 AM (Tuesday)

Millions of ineligible enrollees have been removed from state Medicaid programs over the past year. Medicaid is a means-tested welfare program, so states must properly and regularly assess income to ensure that only people with low-income and who meet eligibility requirements are enrolled. As a result of a stoppage of regular eligibility ...


Adam Millsap: How States Can Help More People Find Meaningful Work
Posted: February 27, 2024 at 08:00 AM (Tuesday)

The January jobs report beat expectations and there are still more jobs available than unemployed people. While this is good news for workers, it makes hiring challenging for employers. Policy reforms that remove barriers to work will expand opportunities for workers and make it easier for employers to find the help they need. The most recent ...


Harold James: The Financial March to War
Posted: February 27, 2024 at 06:10 AM (Tuesday)

BERLIN – Amid heightened global tensions, it is reasonable to worry that the international order is collapsing, and that other priorities have displaced the pursuit of financial stability as a global public good. Old strategies for winning a zero-sum game are re-emerging, with ominous echoes of the twentieth century. Since global ...


John Tamny: Lawrence Summers’s 'Inflation’ Miss Was the Norm Among Economists
Posted: February 25, 2024 at 10:00 AM (Sunday)

We need five years of unemployment above 5% to contain inflation – in other words, we need two years of 7.5% unemployment or five years of 6% unemployment or one year of 10% unemployment (to bring inflation down). – Lawrence Summers, in June of 2022 The internet is forever, or something like that. Which means oh-so-eminent economist ...


Kathleen Hays: Fed Focus on Risk of Cutting Rates Too Soom Marks Imporant Shift: Calomiris
Posted: February 25, 2024 at 08:00 AM (Sunday)

Fed Needs to Acknowledge Mistakes in It's Model, Make Changes. Welcome to Central Bank Central. I'm Kathleen Hays. I'm joined today by Charles Calamari. Let's call him Charlie. I've known Charlie for a long, long time. I think Charlie, when I first started talking to you, and I don't know if I just said you're professor emeritus at ...


Komal Sri-Kumar: Rate Cuts? Yes, But Not For Why You Think!
Posted: February 24, 2024 at 10:03 AM (Saturday)

Expect More Powell Pivots in Coming Months. Is Federal Reserve Chairman Jerome Powell a dove or a hawk when it comes to monetary policy? It all depends on the timing. He told us on December 13 that the focus of the Federal Open Market Committee had shifted from how much further to increase interest rates to discussing when, and by how much, ...


William Dunkelberg: Strong Job Growth Missing On Main Street?
Posted: February 22, 2024 at 02:34 PM (Thursday)

The government reported very strong GDP growth in the second half of 2023, following a 2% increase in the first half of the year. Yet, small business owners seem to have not noticed the surge in growth. The NFIB Small Business Optimism Index (SBOPT) fell two points in January to the lowest reading since May of 2023 and well below the ...


Donald Boudreaux: Milton Friedman Was More Like F.A. Hayek Than He Likely Knew
Posted: February 22, 2024 at 11:00 AM (Thursday)

F.A. Hayek and Milton Friedman are rightly recognized as two of history's most influential champions of the liberal market order, and perhaps the two most influential and important ones of the past 100 years. Both men adamantly insisted that they were liberals and not conservatives, both were founding members of the Mont Pelerin Society, and ...


Veronique de Rugy: Expanding the Child Tax Credit Would Perpetuate Systemic Poverty
Posted: February 22, 2024 at 09:14 AM (Thursday)

The policy is a true budget buster and is ineffective in the long term. In the well-intentioned rush to support American families by expanding the child tax credit (CTC), critical questions are often ignored: Aren't we already doing enough, and is this the best way to help? It's imperative to step back and examine the assumptions at the heart ...


Steve Rattner: Russia’s Resilient Wartime Economy
Posted: February 22, 2024 at 09:00 AM (Thursday)

As the United States contemplates providing further aid to Ukraine and also considers further sanctions against Russia, it should consider the surprisingly robust state of the Russian economy – and what effect it has on Russia's ability to maintain its war against its neighbor to ...


Tomas Philipson: The Backward Economics of Importing Prescription Drugs from Canada
Posted: February 22, 2024 at 06:30 AM (Thursday)

Importation will not lower U.S. prices, because it requires a drug company to compete with itself on price. The FDA recently allowed drugs to be imported into the United States from Canada – a move intended to give American patients access to cheaper medicines. But the price impact in the U.S. will be minimal, while the long-term ...


Nick Timiraos: Fed Minutes Show Unease Over Premature Interest-Rate Cuts
Posted: February 21, 2024 at 04:20 PM (Wednesday)

Only two officials highlighted the risks of keeping rates too high for too long at last month’s policy meeting. More Federal Reserve officials signaled concern at their meeting last month with cutting interest rates too soon and allowing price pressures to grow entrenched as opposed to the risks of holding rates too high for too long. ...