A Happy New Year for Bitcoin?

The future of Bitcoin and other cryptocurrencies does not depend on whether digital currency is a good idea—digital currency or some equivalent is clearly a good idea. What will matter is whether cryptocurrencies are as good as other approaches to digital currency. From this perspective, cryptocurrencies look a bit ridiculous. A digital currency is nothing […]

While visions of Bitcoins danced in their heads

Nothing is but branding makes it so.Hamlet, Act 2, Scene 2, sort of Bitcoin has been branded a currency, and some analysts—even some Fed economists—seem to have fallen for it, arguing that Bitcoin’s value as a transactions vehicle explains why this intrinsically useless item has market value. The trouble is that there is no evidence […]

What will the FOMC be discussing next December?

The FOMC has communicated that it is likely to raise the federal funds rate 25 basis points in its meeting today; it would be a major shift in behavior if it didn’t. Thus, the main thing many folks are talking about is what the Fed will signal in the Survey of Economic Projections (SEP) and […]

What will the Fed do? Nov. 2017 edition

Ideally, if there has been no big news about the economy since the previous FOMC meeting, the FOMC should be back-page news. And maybe as part of “normalization” we are getting back to that: tomorrow’s FOMC announcement is likely to be a very sleepy event. Note: Let’s be clear that I’m talking about Wednesday’s FOMC […]

What the next Fed chair will do

Back in normal times, the following question would have seemed peculiar: Which Fed chair candidate would choose highly accommodative policy if a large fiscal stimulus hits an economy in which the unemployment rate is already at historic lows? The question becomes stranger when we add that the Republicans in power might prefer that Chair. What […]

Yellen for Fed Chair?

I received several comments regarding the post on Jay Powell, asking whether I was implicitly stating a preference for Powell over Janet Yellen. Nope. I clearly should have been less obtuse, but I meant only to be commenting on Powell, who had become a strong favorite according to the betting pundits. The Powell piece started […]

Powell for Fed chair?

According to the folks who bet on such things, Jerome (Jay) Powell is a heavy favorite to become the next Fed chair. I have no special insights into the likely pick, but I do have a pretty good sense of Powell. I was working as a special advisor to the Fed governors when Powell arrived […]

What will the Fed Do? June 2017 edition.

We’ve been reviewing those ‘5 things to watch for’ pieces that often precede FOMC meetings. Our conclusion is that even a Fed groupy is unlikely to find 5 notable things happening at any given FOMC. This is as it should be in an age of transparency. We’re trying a different approach. We’ll try to distill […]

Troubled Fed faces puzzling drop in inflation. And other fake news.

As a holiday sweet in Dec. 2015, we produced an Onion-style Fed watcher analysis of the coming FOMC. One key insight went roughly as follows: Our contacts suggest widespread support on the FOMC for permanently including in the FOMC statement the claim that inflation will run below target due to recent transitory factors. Not Onion […]

In Memory of Carl Christ

Carl Christ, a leading light in the economics profession and a beloved member of the Johns Hopkins Economics department, died Friday April 21. Carl, 93, was one of the most influential economists of his generation working on econometrics, macroeconomic modelling, and monetary and fiscal policy. There is a lovely article about Carl’s life and what […]

Q&A about Fed portfolio normalization

The best way to predict how the FOMC will react to evolving economic conditions, we at the CFE have been arguing, is to listen almost exclusively to communication on behalf of the consensus, and then to, as best as possible, take that communication at face value. As we’ve documented, this approach has had an excellent […]

What will the Fed do? March 2017 edition

After the December FOMC, I posted that I was sticking with a baseline, near-term-rosy Trump outlook, in which a robust economy is greeted by a Fed happily rising rates three or more times. Then as now, I had no great confidence that the rosy scenario would continue to unfold, but forecasting 3 or more rate […]