Your inflation section makes a strong case that much of the move from 4.1% toward 2.5% to 3% is coming from non-Fed forces: energy normalization, fading tariff pass-through, and specific service-price quirks. That seems more directly relevant to this inflation than broad interest-rate adjustments. It reinforces my view that, for this kind of inflation, the more direct tools sit with Congress and the President (i.e., tariffs/war) rather than the Fed.
I would prefer to hear a lot less from The Fed . I don’t act until I see 2 or three moves . I prefer action to talk . Acting on talk is dangerous to your financial health.
As to “ the public would like more information “ …30% of people residing in the USA can’t name a single branch of our government ( Neil Howe ) Gallup
Claudia is probably thinking economists , business owners ,bankers and yes of course she is right . They need to know .
I'm just an ordinary person and I love this stuff , I became hooked in the late 70s , early 80s , with Carter , Reagan and Volker, since then I have become more of a fiscal conservative , I believe that checking inflation early is better. I know that I am not the target audience but I would like to see clearer language .
As a non-lawyer, certainly no expert in Constitutional law, it seems to me that this affair of Lisa Cook is one of many flaws created by the Founders in the structure of our government. They considered the treasury but not banking. So, we are left with the Federal Reserve as one of several institutions established as parallel offshoots of government, intended to be more functional and less political. Others are the Smithsonian, the Library of Congress and the Kennedy Center. What seems to have saved the Fed, at least temporarily, from presidential meddling (and his misogynist racist actions) is the long history of this offshoot of national banking. If one reads the Supreme Court decisions from yesterday, comparing the Cook and Slaughter cases, they represent the "dance" that the Court does over the problem that the Founders could not be 100% prescient, as good as they were, and aspects of societal development could not be defined completely for our present. Hence the Fed is not quite in the Commerce Clause, not quite in the rules about the treasury and the mint. If we ever were to have another constitutional convention to fix the government (danger there!), the Fed would be on the list to be addressed.
Well Done! With respect to "transparency" and the new Fed Chair it is a wait and see time. Healthcare inflation is very problematic in my view as the delivery systems incorporate AI
The Fed shoudl talk plenty about why it did what it did, what it is trying to do and what it thinks the effects of its actions wil be. (The latter two coincide only in the long run.) What it must NOT do is predict what instrument (not just interest rates; IOR, and QT/QE are instrument, too) it will or will not move in the future. It would help if it would do retrospectve evaluations. Does the _Fed_ think that all of the inflation spike was necessary to maintainfull employment or could it have started dialing inflation back sooner? Most people think it could.
Unfortunately I see the mitigation of the inflation as uncertain and temporary. Energy and derived product inflation from the Gulf war will be working through for an extended amount of time. Tariffs that were overruled are being put back into place using BS studies and new authorities.
Combined with AI Capex eating chips and building resources (and growing so fast it's got to be wasteful) I don't see much reversion unless the bubble pops.
Will it be $100 for a loaf of bread? Why promote Econ growth, unemployment to allow 2 percent inflation keeping inflation going up and up? Changes are tough, but results can be worth it. Worked at ohiolmi 1985-2010, friend of Larry less and the late mark schaff.
“a win for interest rates set by economics, not politics”
Any simple distinction along these lines is, unfortunately, misleading — the original name for the discipline, political economy, remains the correct one.
As is always revealed in a crisis, especially war.
“A Fed chair who refuses to show his work is taxing the economy with avoidable risk. By shredding forward guidance, Warsh isn’t restoring discipline – he’s deepening uncertainty. A communications strategy of not communicating definitely helps him balance Trump’s demands with Wall Street’s hopes, but it is not good monetary policy. Markets can try to deal with hawks and they can try to deal with doves. But how can they deal with and price in a Chair who will not say what game he is playing?” — Brad DeLong
It seems the two conservative SCJ's who switched sides are more concerned about Wall St. reactions than the overall economy. With that out of the way, it's still a relief that they chose the actual law over Trumpkopf's fantasies of absolute power.
Now that the Fed has (for the moment) retained its independence, the question of transparency can be addressed. Unfortunately, Warsh - being the fulcrum of transparency - has made it clear he prefers obfuscation.
The inflation we're experiencing right now is unnatural. It's purely a result of bad executive policies. Thus, it's questionable just how much interest rates can really affect it. The Straight of Hormuz is open today. Will it stay open tomorrow? Nobody knows. With the Trumpkopf regime, policy can change with a midnight rage tweet.
This roller coaster ride we're on is making me nauseous.
Your inflation section makes a strong case that much of the move from 4.1% toward 2.5% to 3% is coming from non-Fed forces: energy normalization, fading tariff pass-through, and specific service-price quirks. That seems more directly relevant to this inflation than broad interest-rate adjustments. It reinforces my view that, for this kind of inflation, the more direct tools sit with Congress and the President (i.e., tariffs/war) rather than the Fed.
Excellent points! Keep up the good work.
I would prefer to hear a lot less from The Fed . I don’t act until I see 2 or three moves . I prefer action to talk . Acting on talk is dangerous to your financial health.
As to “ the public would like more information “ …30% of people residing in the USA can’t name a single branch of our government ( Neil Howe ) Gallup
Claudia is probably thinking economists , business owners ,bankers and yes of course she is right . They need to know .
I'm just an ordinary person and I love this stuff , I became hooked in the late 70s , early 80s , with Carter , Reagan and Volker, since then I have become more of a fiscal conservative , I believe that checking inflation early is better. I know that I am not the target audience but I would like to see clearer language .
As a non-lawyer, certainly no expert in Constitutional law, it seems to me that this affair of Lisa Cook is one of many flaws created by the Founders in the structure of our government. They considered the treasury but not banking. So, we are left with the Federal Reserve as one of several institutions established as parallel offshoots of government, intended to be more functional and less political. Others are the Smithsonian, the Library of Congress and the Kennedy Center. What seems to have saved the Fed, at least temporarily, from presidential meddling (and his misogynist racist actions) is the long history of this offshoot of national banking. If one reads the Supreme Court decisions from yesterday, comparing the Cook and Slaughter cases, they represent the "dance" that the Court does over the problem that the Founders could not be 100% prescient, as good as they were, and aspects of societal development could not be defined completely for our present. Hence the Fed is not quite in the Commerce Clause, not quite in the rules about the treasury and the mint. If we ever were to have another constitutional convention to fix the government (danger there!), the Fed would be on the list to be addressed.
Well Done! With respect to "transparency" and the new Fed Chair it is a wait and see time. Healthcare inflation is very problematic in my view as the delivery systems incorporate AI
Best,
tv
The Fed shoudl talk plenty about why it did what it did, what it is trying to do and what it thinks the effects of its actions wil be. (The latter two coincide only in the long run.) What it must NOT do is predict what instrument (not just interest rates; IOR, and QT/QE are instrument, too) it will or will not move in the future. It would help if it would do retrospectve evaluations. Does the _Fed_ think that all of the inflation spike was necessary to maintainfull employment or could it have started dialing inflation back sooner? Most people think it could.
If your take on the response is 'I fumbled a bit', you have very high standards indeed.
Unfortunately I see the mitigation of the inflation as uncertain and temporary. Energy and derived product inflation from the Gulf war will be working through for an extended amount of time. Tariffs that were overruled are being put back into place using BS studies and new authorities.
Combined with AI Capex eating chips and building resources (and growing so fast it's got to be wasteful) I don't see much reversion unless the bubble pops.
Will it be $100 for a loaf of bread? Why promote Econ growth, unemployment to allow 2 percent inflation keeping inflation going up and up? Changes are tough, but results can be worth it. Worked at ohiolmi 1985-2010, friend of Larry less and the late mark schaff.
“a win for interest rates set by economics, not politics”
Any simple distinction along these lines is, unfortunately, misleading — the original name for the discipline, political economy, remains the correct one.
As is always revealed in a crisis, especially war.
“A Fed chair who refuses to show his work is taxing the economy with avoidable risk. By shredding forward guidance, Warsh isn’t restoring discipline – he’s deepening uncertainty. A communications strategy of not communicating definitely helps him balance Trump’s demands with Wall Street’s hopes, but it is not good monetary policy. Markets can try to deal with hawks and they can try to deal with doves. But how can they deal with and price in a Chair who will not say what game he is playing?” — Brad DeLong
It seems the two conservative SCJ's who switched sides are more concerned about Wall St. reactions than the overall economy. With that out of the way, it's still a relief that they chose the actual law over Trumpkopf's fantasies of absolute power.
Now that the Fed has (for the moment) retained its independence, the question of transparency can be addressed. Unfortunately, Warsh - being the fulcrum of transparency - has made it clear he prefers obfuscation.
The inflation we're experiencing right now is unnatural. It's purely a result of bad executive policies. Thus, it's questionable just how much interest rates can really affect it. The Straight of Hormuz is open today. Will it stay open tomorrow? Nobody knows. With the Trumpkopf regime, policy can change with a midnight rage tweet.
This roller coaster ride we're on is making me nauseous.