bank subsidies, federal reserve, liquidity, interest on reserves, interest on excess reserves

In his recent post exploring the welfare implications of the Fed paying interest on reserves, George Selgin observed that if banks failed to maintain optimal reserves, the problem was either incorrect remuneration of reserves themselves, or the Fed’s mispricing of short-term (intraday or overnight) credit. Regarding the latter,…

Jerome Powell, federal reserve, Donald Trump, Fed Chair nomination, monetary rules, NGDP targeting

President Trump’s nomination of Jerome Powell as the next chairman of the Federal Reserve System is a bet that he will continue Janet Yellen’s policies and not rock financial markets. The expectation is that Powell will follow the Fed’s already-announced normalization schedule, which calls for slowly reducing…