Interest Rates
Why Interest Rates Matter
The Federal Reserve’s primary economic policy tool is also a macro-signal of the economy’s health. These days, the Federal Reserve faces a balancing act on how to use its interest...
The Federal Reserve Kept Interest Rates Too High for Too Long: Now What?
At a time when the economy is showing clear signs of slowing and when the banking system is facing serious problems with its commercial real estate loan portfolio, the Powell...
The Federal Reserve Will Cut Interest Rates. But Can a Recession Be Avoided?
If there is one thing we know about monetary policy, it is that its effects are not often felt until after long and variable lags. In general, it takes between...
Recession Coming? Why the Federal Reserve’s High Interest Rate Policy May Backfire
The Federal Reserve is no stranger to doing too little too late when it comes to monetary policy. This makes it all the more regrettable that today, the Fed once...
Why Won’t the Federal Reserve Start Cutting Interest Rates?
Milton Friedman famously taught that monetary policy operates with long and variable lags. By this, he meant that the effects of raising or lowering interest rates should not be expected...
The Federal Reserve’s High Interest Rates Could Morph Into a Crisis
When it comes to economics, there are few things about which we can be entirely sure. However, following today’s stronger-than-expected employment numbers, we can be sure that the Federal Reserve...
Problem for the U.S. Economy? Interest Rates Won’t Get Slashed Anytime Soon
If there’s one thing you can say about Fed policymakers, it’s that they don’t make decisions on a whim. When the Federal Open Market Committee met on Jan. 31, 2024,...
The Federal Reserve’s Inflation Nightmare Won’t Go Away
When Henry Kissinger asked for his opinion about the influence of the French Revolution, Chinese premier Zhou Enlai purportedly replied that two hundred years on it was “too early to...
2024: The Year the U.S. Economy Could Enter a Recession
Shortly after the 2008–2009 Great Economic Recession, an apocryphal story circulated about the captain of the Titanic. When asked in the investigation of the Titanic’s sinking why he did not...
The Federal Reserve Has a Money Supply Problem
There was some good news and some bad news coming out of yesterday’s Federal Reserve interest rate-setting policy meeting. The good news is that the Fed now seems to have...
The Federal Reserve’s Money Supply Problem
If the past is any guide, when the Federal Reserve meets next week, of one thing we can be sure. The Fed will continue to adhere to a strictly data-dependent...
Will the Fed Reserve Cut Interest Rates Next Year?
One of life’s greatest—and most dangerous—temptations is to confuse one’s expectations with one’s hopes. The financial community seems to have succumbed to this. Despite what the Federal Reserve has said...