The LSE has a new blog on American politics and policy and they kindly asked me to be one of the first set of contributors. I shared a few thoughts on recent US monetary policy, many of which I’ve discussed before in various places, including my recent Mercatus paper.
So while wrapping up QE is a necessary start to avoiding the problem of inflation, figuring out how to reduce the Fed’s balance sheet, which has more than tripled since 2008, is the bigger challenge.
In addition, more attention will have to be paid to the real economy and the various factors that are creating the uncertainty that is making banks hesitant to lend and firms unwilling to borrow and invest.Publish
More at the LSE site.