The few remaining signs that the US economy is headed for a recession are vanishing before our eyes.
A group of conservative Republicans representatives known as the House Freedom Caucus came out last week against any proposal that would lift the cap on deposit insurance, currently set at $250,000. Members of US Congress on both sides of the aisle are understandably cautious about taking such a dramatic step in the middle of an unfolding crisis.
If you believe in the Milton Friedman adage that inflation is always and everywhere a monetary phenomenon, then you should also believe that the Federal Reserve can stop increasing interest rates. Now.
The collapse in the personal US saving rate to near a record low has fueled a narrative that consumers are clearly strapped heading into 2023.
As president of the Federal Reserve Bank of New York and vice chair of the policy-setting Federal Open Market Committee, John Williams is perhaps the second-most influential US central banker behind Fed Chair Jerome Powell.
Presidential administrations never stay the same from beginning to end. Top personnel come and go for various reasons, and we seem to be seeing that now with the Joe Biden administration.
It’s generally accepted among economists and investors that the Federal Reserve has an impossible task of getting inflation under control without broad and lasting damage to the economy.
The causes of inflation can be hard to isolate, but in the US at least, one culprit is clear: President Joe Biden and congressional Democrats spent too much in the last two years, and even now refuse to take steps that would ease the problem.
The U.S. Federal Reserve is widely expected to raise interest rates by at least a 25 basis points next week. And if inflation stays high, the Fed is “prepared to raise by more than that” in the coming months, Chair Jerome Powell said last week.
In his State of the Union address last night, President Joe Biden told Americans that he had a realistic plan for bringing down inflation. The agenda he laid out, however, has little chance of doing so.
Some deficit hawks acknowledged that the U.S. was in a period of extraordinarily low interest rates. But they warned that this phenomenon could reverse itself at any time. What they misunderstood is the effect that the response to secular stagnation would have on the overall economy in the short term.
The success or failure of President Joe Biden’s legislative agenda could depend on a single senator from a mountainous state who has idiosyncratic views and is not especially popular in his own party.