It occurs to me that recent discussions of the Fed's new average inflation targeting plan gloss over a subtle distinction between two different kinds of Average Inflation Targeting (AIT). Hence this post explaining the difference, and why I think it matters. The difference between the two sorts…
In the long, tragic chronicle of the Great Recession, April 30, 2008, doesn't resonate as an infamous date. It lacks the notoriety of March 16, 2008, when, by guaranteeing $30 billion of Bear Stearns' assets, the Federal Reserve crossed a last-resort lending Rubicon, extending its safety net…
Alternative monetary policy targets continue to gain advocates. While Chair Powell was waiting to take over leadership at the Fed, internal support for rethinking the current inflation rate target was building. And while there are various possibilities to consider — such as raising the inflation rate target,…
The Federal Reserve released the minutes from its June policy-setting meeting yesterday afternoon. The Federal Open Market Committee (FOMC) minutes reflect an economic outlook consistent with recent public comments made by Fed officials: an improving labor market, confidence that the current path of monetary policy will achieve 2% inflation…
Although it has gained many converts since 2008, thanks especially to tireless crusading on its behalf by Scott Sumner, David Beckworth, and Lars Christensen, among other "Market Monetarists," the suggestion that the Fed ought to stabilize, not the inflation rate, or employment, but the growth rate of…