Commentary

Reality Check

Today, the Fed made it clear there’d be fewer rate cuts in 2024, most likely one or two, with a start more likely after the election than before. Meanwhile, the Fed made a mess out of explaining its logic for their new path forward.

Commentary

Spotlighting Inequality

With a Presidential election less than five months away, expect to hear a great deal of discussion about inequality: the gap between the rich, the poor, and the middle class.

Commentary

Waiting on the Fed

One of our main contentions in recent months is that the Federal Reserve, by switching from a scarce reserve model to an abundant reserve model, has completely taken over the short-term interest rates marketplace.

Commentary

Housing Update

Two reports on home prices arrived this morning, one for the Case-Shiller index and another from the FHFA (a government agency that regulates Fannie Mae and Freddie Mac). Both rose in March, and housing prices are up 6.5% and 6.8%, respectively, in the past year.

Commentary

Are Abundant Reserves Paying for the CFPB?

Back in 2008, the Federal Reserve made important changes in the way it handles monetary policy. We’ve written about them several times, but few really understand. The press won’t ask questions about it and few economists discuss them.

Commentary

Would Trump Reignite Inflation?

One theory making the rounds is that if President Trump gets back into office, inflation is going to surge.

Commentary

The Fed Faithful

If the financial markets have a religion, we think we know what it is: a deep and abiding faith in the ability of an omniscient Federal Reserve to ride to the rescue if and when the economic weather turns bad.

Commentary

A Lack of Confidence

No shortage of things to discuss after today’s Fed statement and subsequent press conference.

Commentary

The Worst Malinvestment

Austrian Economics argues that growth comes from innovation and entrepreneurship, with “the market” directing resources to areas of the economy that provide the greatest returns.

Commentary

Continued Growth in Q1

The economy continued to grow in the first quarter at what we estimate is a 2.6% annual rate. That’s a slowdown from the 3.1% rate in 2023, but still good compared to the past couple of decades when the average growth rate has been 2.0%.

Commentary

Elections Matter

Mistakes in both geopolitical and fiscal policies compound over time, often leading to more mistakes.

Commentary

Is the Fed Tight, or Not?

In the waning seconds of one of the most watched women’s college basketball games ever, a foul was called.

Commentary

The Fed Audit

Several years ago some politicians started demanding that the Federal Reserve get audited. We think the idea has some merits but also some drawbacks, as well.

Commentary

Welcome to State-Run Capitalism

We’ve mentioned this before, but it bears repeating. It seems that investors pay as close attention to what the government is doing, as they do to actual business news. We don’t think investors are wrong to do this, but it’s only because government has become so big.

Commentary

Rate Expectations

There was zero chance the Fed was going to cut rates today; instead it was all about what today’s meeting, the dot plot, and the press conference meant for the timing and pace of rate cuts in the months ahead.