Alex Williams
Many economists and commentators disfavor reasoning about inflation from individual price increases, yet still use "core inflation" metrics, which embed reasoning about inflation from individual price increases.
More problems with "Real Wages"
Energy security has taken on new importance in wake of Russia’s invasion of Ukraine. We can use existing tools to confront these challenges without sacrificing our climate goals.
Commentators across the ideological spectrum have argued that inequality justifies a more hawkish path for monetary policy. These arguments miss the fact that interest rate policy primarily slows consumer spending and consumer price inflation by slowing down the labor market first.
Conventional wisdom has held that rate hikes slow inflation long enough that straightforward accounts of how exactly one turns into the other are hard to find. Today, everyone needs to be on the same page about how exactly it is that Fed policy in particular can slow inflation.
We provide an update on what our in-house monetary policy framework suggests about the appropriate trajectory for monetary policy using more reliable “real-time” measures of gross labor income
To understand how the Fed is interpreting its “maximum employment” mandate in the current context, it’s worth going through Chair Powell’s remarks and Q&A for the December FOMC meeting.
Critical to the Fed successfully achieving maximum employment over the short run and the longer run is a commitment to, and a communication of, “maximum employment” that is Credible, Broad, and Inclusive.
It is key for commentators and policymakers to bear in mind that "transitory vs. persistent" is not the same debate as "narrow vs. broad-based."
