He writes and quotes WSJ to make his point on Trump:
This, by the way, is the opposite take of many free market Fed watchers who think the Fed might want to slam it to Trump and raise rates aggressively if he wins.Conditions are moving in the right direction, but the Fed still waits for some "further" evidence. Continuation of recent trends is likely sufficient to be that "further" evidence needed to justify a rate hike in December.What would derail a December rate hike? Greg Ip at the Wall Street Journal speculates that a Trump win in next week's election would do the trick:...a Trump victory would probably cast enough of a pall over the outlook to give the Fed reason to delay its next rate increase into next year. Ironically, Mr. Trump may discover that he, not Mr. Obama, is the reason the Fed hasn’t tightened.Agreed, although this doesn't seem likely at this juncture. More likely to stay the Fed's hands would be a slowdown in hiring to something closer to 100k a month. That would probably end the downward pressure on the unemployment rate and raise questions about the Fed's basic forecast that the unemployment rate will continue to decline in the absence of additional rate hikes. We get two employment reports before the December meeting; for the Fed to stay on the sidelines yet again, we probably need to see both reports come in weak.
-RW
From the Department of What We Should Do Going Forward: Why don’t we make an effort so that EVERYONE understands that:
ReplyDeleteA. Inflation is a purposeful government policy, not a mysterious force of nature;
B. People receiving the new funny money first are stealing purchasing power from you;
C. The Federal Reserve system is the entity that creates inflation and it is utterly illegal and unconstitutional. Its new funny money loans and emissions result in deceptive and unsustainable prices which cause the boom bust cycle. People make grandiose investment decisions based upon these false prices which are invariably unsustainable.
D. The advocates of the funny money system maintain that “the free market” and “the invisible hand” failed in 1929 and demonstrated that “the economy” requires a constant injection of government “stimulus”. However, once faced with the simple fact that wartime and post WWI monetary shenanigans caused the crisis, you will find the advocates of stimulus totally unable to point to that historical event where the market failed and demonstrated that it needs a boost. If the market does not need a “boost”, all non-Austrian economics collapses instantaneously.
E. All non-Austrian advocates act like Hillary supporters ALL OF THE TIME. They do not and will never actually engage us. This last election period should have made that clear. Reading Krugman should have made that clear. Reading the MMTers should have made that clear.
People must understand A and B before they will understand C-E. There is no excuse for people who understand A-C not grasping D and E.