You make a good point about climate change affecting productivity down the line, but it would be nice if DC had any sense to address this important issue as temps are getting warmer, storms are more powerful, flooding, plus people and animals are dying. I agree, it should be boring as they continue to be obsessed with this 2% mandate. As we know, workers wages are growing, but they don't deserve to bear the brunt of the fed's inflation fight. It's good however we won't get a recession this year but who knows when 2024 begins. As I've said before, inflation has come down and its hardly got anything to do with the fed rate hikes (which in reality have made those who hold US treasuries richer). We'll see what happens Friday.
I just wish Powell would say that the Fed has a 2% PCE FAIT and does at each meeting what it thinks will best achieve that objective and of course it would never predict what its future actions will be because it cannot predict the economic date that its policy instrument setting is based on.
And since that is exactly what he should say after every OMC meeting, to Congress, to anyone who will listen, saying it again a Jackson Hole should be pretty boring.
Now if the Fed staff have any new info about sticky prices having become more or less sticky or crystal ball gazing about the size and frequency of economic shocks that would shed light on whether the target or the flexibility of FAIT should change, THAT would be interesting. But Powell should keep that out of his speech.
Now is someone wants to drop the hint that lower fiscal deficits, ceteris paribus, mean lower interest rates, higher private investment and faster growth, that would be nice.
Thanks. It cannot be said too often that the Fed's allowing inflation to undershoot its target was a huge, decade-long mistake. It will be a mistake as well if Powell mistakenly allow recession in pursuit of a too-rapid recovery from the inflation the Fed itself produced by failing to raise rates in September 2020 instead of 2021.
I was thinking that we had a productivity surge in the 90s but not in the 80s or after because we had a new technology coming into its own and some economists think there were other new technologies like electricity that produced economic surges as well. One other way to maybe increase productivity is the French idea of making companies invest 1.5 percent of their time training employees or pay an added 1.5 percent tax.The government prefers the training over the tax revenue.The added training gives the workers more knowledge and job security.Also some economists have focused on how wages have not been parallel with productivity in recent years for the first time , not good for production workers and in the long run maybe productivity.The great corporate breakaway!
Um, wages decoupling from productivity isn’t a new thing at all. It’s a given with the cancer of neoliberalism we’ve been suffering for the past 40 years.
The Fed's job is to successfully target inflation (target it at the income maximizing level ~ recession preventing level). It should not get distracted with perusing * variables.
Even more to the point Fiscal policy makers can reduce deficits (taxing net CO2 emissions would be a double benefit) and attract high-earning immigrants.
You make a good point about climate change affecting productivity down the line, but it would be nice if DC had any sense to address this important issue as temps are getting warmer, storms are more powerful, flooding, plus people and animals are dying. I agree, it should be boring as they continue to be obsessed with this 2% mandate. As we know, workers wages are growing, but they don't deserve to bear the brunt of the fed's inflation fight. It's good however we won't get a recession this year but who knows when 2024 begins. As I've said before, inflation has come down and its hardly got anything to do with the fed rate hikes (which in reality have made those who hold US treasuries richer). We'll see what happens Friday.
I just wish Powell would say that the Fed has a 2% PCE FAIT and does at each meeting what it thinks will best achieve that objective and of course it would never predict what its future actions will be because it cannot predict the economic date that its policy instrument setting is based on.
And since that is exactly what he should say after every OMC meeting, to Congress, to anyone who will listen, saying it again a Jackson Hole should be pretty boring.
Now if the Fed staff have any new info about sticky prices having become more or less sticky or crystal ball gazing about the size and frequency of economic shocks that would shed light on whether the target or the flexibility of FAIT should change, THAT would be interesting. But Powell should keep that out of his speech.
Now is someone wants to drop the hint that lower fiscal deficits, ceteris paribus, mean lower interest rates, higher private investment and faster growth, that would be nice.
If it´s going to be a "Star-ry night" it´s going to be a waste of time.
https://thefaintofheart.wordpress.com/2016/08/10/the-fed-wastes-time-star-trekking/
Thanks. It cannot be said too often that the Fed's allowing inflation to undershoot its target was a huge, decade-long mistake. It will be a mistake as well if Powell mistakenly allow recession in pursuit of a too-rapid recovery from the inflation the Fed itself produced by failing to raise rates in September 2020 instead of 2021.
I was thinking that we had a productivity surge in the 90s but not in the 80s or after because we had a new technology coming into its own and some economists think there were other new technologies like electricity that produced economic surges as well. One other way to maybe increase productivity is the French idea of making companies invest 1.5 percent of their time training employees or pay an added 1.5 percent tax.The government prefers the training over the tax revenue.The added training gives the workers more knowledge and job security.Also some economists have focused on how wages have not been parallel with productivity in recent years for the first time , not good for production workers and in the long run maybe productivity.The great corporate breakaway!
Um, wages decoupling from productivity isn’t a new thing at all. It’s a given with the cancer of neoliberalism we’ve been suffering for the past 40 years.
So what's the point of all this?
What do you mean?
The Fed's job is to successfully target inflation (target it at the income maximizing level ~ recession preventing level). It should not get distracted with perusing * variables.
“Fiscal policymakers should have a Jackson Hole. They affect the structural.“ — what does that mean?
They can directly affect structural features of the economy, like productivity, for example, by lessening climate change. The Fed can't do that.
Even more to the point Fiscal policy makers can reduce deficits (taxing net CO2 emissions would be a double benefit) and attract high-earning immigrants.