2021 in the Rearview: December FOMC Recap
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.
Fed Policy
23 postsA Credible, Broad and Inclusive Approach to Maximum Employment
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.
Closing In On A Key Milestone For The Fed's "Maximum Employment" Forward Guidance
If the Fed wants to stay true to the "maximum employment" component of its forward guidance, and the "broad and inclusive" nature of that goal, it is imperative that their interest rate policy actions reflect a full recovery on both of these measures.
QE Magic, Used Cars, and Omicron: Tapering While Preserving Optionality
The policy mistake worth worrying about isn’t the speed of taper per se; it's the signal that taper sends about the timing of liftoff in interest rate policy.
Inflation Expectations: Three Stories in Search of Evidence
Despite widespread use by commentators and policymakers, the models commonly used to argue for the importance of "inflation expectations" are difficult to confirm empirically, and risk a hawkish policy bias.
