San Francisco President John Williams spoke last Sunday, reiterating his position that the Fed would hike 3 times this year. Looking only at the inflation rate (as measured by the PCE) and the unemployment levels, the Fed considers its dual mandate as having been met. On the surface this justifies a rate hike, according to mainstream economic
The Fed’s economists are always coming up with deranged new ideas and when they fail to reach their goals the first time, they double down. In the recent decade they picked the completely arbitrary inflation growth rate of 2% (as calculated by the misleading PCE) and stated that for the economy to be on a strong trajectory, 2% inflation was a
There are currently three open Federal Reserve Board of Governors positions and the New York Times reports that Trump is ready to nominate the following two: The expected nominees include Randal K. Quarles, a Treasury Department official in the George W. Bush administration, and Marvin Goodfriend, a former Fed official who is now a professor of
It’s a slow week for the Fed as they gear up for next week’s FOMC meeting and subsequent announcement. In the days ahead, there will be much commentary about whether or not the Fed is going to raise rates. For example Tim Duy, who is always happy to support the Fed’s inflationary excesses, is worried about the strength of the economy in the case
The BEA’s “advance estimate” release of Q1 GDP came in today at a very low 0.7%, indicating severe slowdown of growth. The growth rate was attributed to slowed consumer spending, downturn in inventory investment, and a slowdown among state and local spending. Of course, this exposes one of the problems with GDP in the first place: it relies on
The Atlanta Fed’s final projected Q1 GDP growth rate was 0.2%. That was down from over 3% earlier in the year. Q1 GDP’s actual (”advanced”) number ended up being 0.7%, so the 0.2% was pretty close. But now, the second quarter has begun and the hilarity begins immediately. The forecast has jumped from the 0.2% to a 4.3% forecast for Q2, in a
At 2:00 pm Eastern, the FOMC made their policy announcement as their meeting came to an end. As expected the Fed did not raise the Federal Funds rate target at this May meeting. Two items are in focus now, however. The first is the possibility of a June hike. As always, the Fed wants be clear that such a move is “on the table.” Prior to the
Fed Vice Chairman Stanley Fischer spoke first on Friday morning and made it clear that the Fed’s discretionary approach to monetary policy was to be preferred over a “rules-based” approach. That is, the flexible judgment calls of the economists at the helm of the economy are going to be more accurate than a mathematical model. Such arrogance,
Last Friday featured a handful of Fed speeches, and this week began the same. Cleveland Fed President Loretta Mester warned against “moving too slow” on interest rake hikes, implicating that she would prefer that the Fed hike faster than the Fed’s current “gradual” approach. Mester is not a voting member, and one of her statements was
June’s FOMC meeting concluded today and the meeting announcement revealed an interest rate hike of .25% to bring the Federal Funds target to between 1 and 1.25%. Additionally, we also learned that the FOMC anticipates one more rate in 2017, 3 more in 2018, and the beginning of a balance sheet reduction effort starting this year. Of course, the
What is the Mises Institute?
The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard.
Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.