There are two parts to forecasting monetary policy: forecasting what picture the economy will present to the Fed, and forming a judgment about how the Fed will react to that picture. The first of these is pure forecasting—what will happen tomorrow? Given a macro forecast, the second mainly requires a view about the Fed’s ongoing […]
Blog Archive
How about we settle for a well-run government?
Classroom duties this Spring were spiced up a bit by the steady flow of teachable moments coming from Washington. For economists, one juicy tidbit came when we read that Jared Kushner had been put in charge of an effort to make government run like a business. A final exam question practically writes itself: What does […]
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 […]
Budget Projections, Interest Rate Assumptions, and Preposterous Assertions
Since early 2014, we’ve been lamenting the fact that CBO has persisted in telling the same Armageddon budget story as it was telling 2009-2012, despite the fact that the deficit picture had dramatically improved. We mused aloud that if real debt problems did reappear, they might regret having spent several years crying wolf. If we […]
The Saudis: Thinking clearly and trolling for chumps?
When the news about a possible ARAMCO sale hit about a year and a half ago, we posed a question: What if the Saudis have finally gotten the joke? The real return to holding oil in the ground has been negative over the last 44 years, as a succession of peak oil predictions were met […]
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 […]
Populist policies cause immediate misery. Or not.
As a professional economist, I am quite certain that most readers of this blog could cancel their insurance policies and spend the savings on a pleasant party. And with any luck, the good times could go on for, as the Fed would say, a considerable period. The Wall Street Journal, a few weeks back, described […]
Genetics and Investment Returns
Fortune magazine is featuring exciting new genetic research by Johns Hopkins researchers. This might not seem so surprising, but we’re pretty sure it’s a first that the genetic research comes from the Economics Department and concerns investment behavior. Assistant Professor Nick Papageorge (by general consensus the coolest person on our faculty) along with two of […]
Surely we're behind some curve!
Let us take a moment explicitly to place the CFE in the pro-facts camp. We are honored to work at Johns Hopkins University, the first modern research university in the U.S., founded on a hard-nosed commitment to facts and with a mission to discover facts and to teach how to deploy them constructively. Ok, got […]