Warsh's Challenges: Monetary Policy
Kevin Warsh was nominated to lead the Federal Reserve in January, sparking a debate over whether the Fed should accelerate interest‑rate cuts based on expectations that artificial‑intelligence‑driven productivity would lower prices and boost wages. That optimism has been upended by a new stagflationary shock, with inflation spiking due to tariffs and higher energy costs tied to the Iran conflict. The Fed now faces a dilemma: raise rates to combat rising prices and risk political backlash, or tolerate higher inflation and risk eroding purchasing power.
Has the Time Come for Dollarization in the Americas?
A Cato Institute panel convened last week to examine the prospect of dollarization in Latin America, with a focus on Argentina’s persistent monetary turmoil. Featuring economist Emilio Ocampo, former World Bank president David Malpass, and moderator Ian Vásquez, the discussion...
The Iran War Doesn’t Have to Be a Rerun of ‘That ’70s Show’
The Wall Street Journal op‑ed warns that the Iran‑Israel conflict could push crude to near $100 a barrel, reviving the oil‑price shock that helped trigger the 1970s stagflation. However, the United States now runs a net oil export surplus and...
Inside the Fed's Balance Sheet
A new video and podcast interview with finance professor Darrell Duffie examines the Federal Reserve’s balance sheet. Duffie draws on his recent paper to explain how the Fed’s roughly $8 trillion asset base shapes the U.S. payments system and monetary policy....
How to Turn a Price Shock Into Inflation
The European Commission has unveiled an emergency toolbox of subsidies, tax cuts, price caps, and relaxed aid rules to help member states, including Greece, cope with soaring energy costs. The package aims to shield households and businesses while easing the...