This is an excerpt from Counter-Intuitive Inflation. We’ll be posting sections over the first two weeks of October. Introduction: During inflationary times, and especially when we have high employment and growing GDP, the Federal Reserve raises interest rates to reduce inflation. Raising interest rates is a crude tool, but historically, an effective one. Now, some … Read more
This piece was originally published on September 20th, 2023. The Federal Reserve completed their September meeting and as expected, kept the fed funds rate unchanged. The “surprise” was in the dot plot. The dot plot is where each Fed Governor indicates where they expect rates to be at various points in the future. It further … Read more
This piece was originally published on August 25th, 2023. Fed Chairman, Jerome Powell, spoke in Jackson Hole today. Here are my notes on the speech with some additional commentary: Quickly said there’s a “long way to go” to get inflation under control. (DKI: He’s telling investors the “pivot” to lower rates isn’t coming anytime soon.) … Read more
This piece was originally published on August 16th, 2023. Earlier this week, we got retail sales data indicating the US consumer continues to spend without pause. Today, we got to see the minutes from the most recent Federal Reserve meeting where they wrote: “With inflation still well above the Committee’s longer-run goal and the labor … Read more
This piece originally appeared on August 10, 2023. There’s been a lot of hope and enthusiasm in the press and the stock market for a “soft-landing”. The idea is that the Federal Reserve may be able to start to bring down interest rates at just the right time and avoid a recession. Supporting that point … Read more
