In some previous posts, I've taken Federal Reserve officials, including former New York Fed President William Dudley, to task for continuing to insist that the Fed's post-2008 "floor" operating system is a "simple" means for keeping overnight interest rates on target. Whatever the floor system's merits may…
Back in the spring of 2018, yours truly responded at length to a speech then New York Fed President Bill Dudley gave, defending the Fed's "floor" system of monetary control. In that speech, Dudley claimed that "the case for retaining the current floor system is very compelling."…
"If you put the federal government in charge of the Sahara Desert, in five years there'd be a shortage of sand." (Attributed to Milton Friedman) While my fellow Fed-watchers have had their eyes firmly glued to the repo-market for several weeks now, I've been preoccupied with…
The Fall 2019 edition of the Cato Journal, the Cato Institute’s interdisciplinary journal of public policy, is now available online. Readers of Alt-M will find the articles on monetary and financial topics of special interest. Their topics range from financial inclusion, to macroprudential policy, to Modern Monetary…
If the recent yield curve panic proves anything, it proves that, in financial markets, what may start out as a mere statistical correlation, and possibly a spurious one, can become a genuine causal relationship. In particular, if enough people subscribe to a post-hoc fallacy, it may not…