Repo Rate Gap Shifts Policy Transmission to Market Frictions
TLDR: widening gap between secured repo rates and IORB/fed funds => monetary policy transmission now depends more on repo market frictions & leveraged players => an argument for targeting the SOFR rate? Or an argument to get our fiscal house in order?
Sumner Hails Halperin as Pragmatic NGDP‑Targeting Economist
Scott Sumner on @BasilHalperin: "I see Halperin as a pragmatist in the tradition of Bennett McCallum, which is one reason why he’s my favorite young macroeconomist... Like McCallum, Basil Halperin seems to have absorbed both the best of New Keynesian...
Fed Briefly Employed Tiered Reserves During 2008 Crisis
🚨 Fed actually used a tiered reserves system temporarily in 2008🚨 — Darrell Duffie @HooverInst monetary policy conference https://t.co/CPW11sBr1e
Powell’s Capitol Hill Testimony Exhausts Congressional Audiences
Fed Chair Powell really did “wear out the carpets” on Capitol Hill. (A slide from @td_econ’s presentations at @HooverInst monetary policy conference.) https://t.co/QZA1xbFmKC
EU Split: Two Opposing Economies, One Narrative Debate
“The EU is not one economy moving slowly. It is two economies moving in opposite directions, and the disagreement about which story is true is really a disagreement about which Europe you are looking at.” Great article from @lugaricano https://t.co/e4ndiSLV7h...
Inflation Fears Persist, yet Long‑run Expectations Stay Anchored
Americans remain deeply scarred by the COVID inflation surge. Inflation expectations, Google searches, and demand for inflation hedges all remain elevated. But longrun NGDP expectations still look anchored. The Fed’s credibility endures. My latest: https://t.co/0JXpX63EwQ @Austan_Goolsbee @MaryDalyEcon @annap_2013
Monetary Policy Must Adapt to AI-Driven Growth
All you need to know about monetary policy in a world of AI-supercharged growth. ⬇️
SNB Balance Sheet Exceeds GDP, Driven by Foreign Holdings
Meet the SNB balance sheet: 110% of GDP, most assets are foreign currency holdings, and there is a unique ratchet effect tied to the persistent disinflationary pressures. Big fiscal implications. Great piece by @BenignoGianluca https://t.co/5U8fazsXqT (h/t @M_C_Klein) https://t.co/BBRmXx74wL
Fed Banks' Deferred Losses Could Delay Treasury Payments Past 2030
Great note from @billnelson2x2. Each Fed bank has its own deferred asset, a cumulative sum of its losses. It has to be repaid before remittances can be sent to Treasury. Some Fed banks will be paying them off long past...
AI‑driven Growth Outpaces Bond Market Optimism
Thrilled to have @BasilHalperin join the podcast. Three big points discussed: (1) AI could supercharge growth, but bond markets aren’t buying the hype as evidence by real interest rates; (2) inflation targeting not an optimal response to AI supercharged growth......
Central Banks Pivot to Demand‑driven Liquidity, Warsh Aligns
With Kevin Warsh's nomination locked in, here's my recent take on central banks' growing shift from supply-driven ample reserves to demand-driven liquidity frameworks. The best version of Warsh's balance sheet ambitions would follow this trend.
Hidden Forces Eroding the Foundation of Dollar Dominance
Interesting thread that makes the case for what @sobel_mark calls the "termites feasting away at the foundation of dollar dominance". Should give us pause... (1/2)
Cash Surges in 2025, Boosting Fed Balance Sheet
𝐂𝐚𝐬𝐡 𝐢𝐬 𝐝𝐞𝐚𝐝. 𝐋𝐨𝐧𝐠 𝐥𝐢𝐯𝐞 𝐜𝐚𝐬𝐡. The @NewYorkFed's SOMA annual report shows currency growth accelerated in 2025! This is a bit surprising given the digital age, but it bodes well for the Fed's balance sheet and operating income. (1/7) https://t.co/jvk7p0srbM
Follow Dan
This is along the lines of what @DanAwrey has recommended, rather than relying on OCC Trust charters and skinny Fed master accounts. https://t.co/2MP5UWLpHM
History Reveals What Truly Anchors Price Levels
From bimetallism to the gold standard to fiat money, what really anchors the price level? Is it the monetary standard, the fiscal backing, politics, or all the above? Monetary historian Kris Mitchner joins the podcast this week to help us...