The Fed's New Framework
Updated: 2024-11-10 08:40:35
: Macro Musings Blog Pages Wednesday , September 2, 2020 The Fed's New Framework I have a new article presenting my take on the Fed's new average inflation target AIT It includes an explanation of how it works compared to the Fed's previous inflation target and what it could mean for the recovery . I note that although AIT it is not quite a NGDP level target , it is a step in that direction . Moreover , it could lead other central banks to follow suit . Check it out Also , here is an earlier piece I wrote on make-up policy and how it could be best implemented via a NGDP level target . It was published before the big announcement last . week Finally , here is St . Louis Fed President Jim Bullard's take on AIT . He explains how this new framework gets us fairly close to NGDP level targeting
: Macro Musings Blog Pages Monday , September 9, 2019 Some Assorted Macro Musings Dollar Dominance I have been part of a dollar dominance conversation for the past few weeks . It started with my NRO , article discussions on the topic at the Jackson Hole conference , and a follow-up blog post Later , there were twitter conversations , an i nterview on Bloomberg TV and several podcast recordings . This all culminated in an article I wrote for The Bridge that summarizes what I see as the main issues of dollar dominance and what realistically can be done about it . Check it out and also see the follow-up twitter thread I provided that documents some of the claims made in the . piece Paul Volcker is What the Public Wanted Back in May , I interviewed Robert Samuelson about his book on the Great
: : Macro Musings Blog Pages Friday , September 21, 2018 FOMC Preview : We Have the Nerve to Invert the Curve The quote in the title should be the motto for the 2018-2019 FOMC . For the FOMC is set to raise its interest rate target next week and expected to raise it several times more in 2019 despite a flattening treasury yield . curve As seen in the above chart , the outright inversion of the treasury yield typically leads to a recession . nbsp Despite this robust pattern a growing number of Fed officials have become emboldened in their dismissal of it since this time is different . As Caroline Baum notes , nbsp In April , John Williams acknowledged that an inverted yield curve is a powerful signal of , recessions based on a significant body of research including that by staff economists