Suborning the central bank will obviously have implications for monetary policy. But the power that could be exercised via regulatory and supervisory control of the banking system is even greater.| The Overshoot
Even if the underlying technology turned out to be mostly useless, the spending occurring right now is massive. And it may not be fully captured in the official GDP numbers.| theovershoot.co
Even if we try to "look through" the impact of tariffs, which could be unwise, the inflationary trend remains persistently faster than before the pandemic, and possibly faster than in 2024.| The Overshoot
The current U.S. administration is determined to squander the benign conditions it inherited. Federal Reserve officials were wise to avoid adjusting policy.| theovershoot.co
Unilaterally raising costs for Americans can harm people in the rest of the world, but not much more than any other policy that reduces the purchasing power of the U.S. private sector.| The Overshoot
Methodological flaws encourage persistent imbalances and discourage some reasonable responses by governments to protect their citizens.| The Overshoot
There is no sane reason for the Fed to cut much, if at all. But the wannabe Erdogan (with a pinch of Nixon) has different ideas.| theovershoot.co
Policy tightening helped reduce inflation, stabilize the currency, and improve the country's fragile financial position. But Turks are still worse off than before thanks to rule-of-law concerns.| theovershoot.co
The risks are skewed in one direction: up.| theovershoot.co
While income growth and inflation remain stubbornly faster than pre-pandemic, measures of joblessness and employment may be deteriorating.| theovershoot.co
The latest data available on the job market, inflation, and business sentiment all suggest that the current constellation of interest rates is broadly consistent with underlying economic conditions.| The Overshoot
Inventory accumulation is almost certainly being undercounted. Data center investment may also be undercounted. But there was still a substantial slowdown that could get worse.| theovershoot.co
Long-end interest rates are rising after a prolonged period of being unusually low relative to short-end rates. Even the moves in Japan look less scary when viewed in light of the fundamentals.| The Overshoot
The U.S. dollar is widely used outside the United States. That has implications for Americans that need to be managed, creating a tradeoff between domestic macro stability and fiscal "sustainability".| theovershoot.co
It *should* be easier to replace lost demand than lost supply, but there are good reasons to wonder whether it is actually possible for the party-state to pull it off.| theovershoot.co
The limits of U.S.-China decoupling, the principled case for an American industrial renaissance, and the scope for (desirability of?) capital flight from the U.S.| theovershoot.co
This is bad policy, executed thoughtlessly. But it is worth thinking through exactly *why* it is bad.| The Overshoot
Goods inflation was already accelerating while job churn had stopped falling. Also: watch out for upward revisions to healthcare inflation.| theovershoot.co
By doing exactly what they were planning to do before, at least for now.| The Overshoot
Banks and credit unions earned free money by borrowing from the Fed's "emergency" program and then lending it back to the Fed (or other banks) at higher rates.| The Overshoot
Imports of gold bars turn out to be surprisingly important. Plus: some thoughts on the February jobs numbers.| theovershoot.co
Policy choices over the past six weeks risk pushing a previously strong economy into a world of faster inflation and slower real growth.| theovershoot.co
The federal deficit is larger than in 2018-19 mostly because interest rates on existing debt are higher. What does it all mean?| theovershoot.co
Just compare what they were willing to accept back in June to what they hope will happen now.| theovershoot.co
There is much less to the rise in joblessness than meets the eye, while annualized wage growth is still running about 1.5 percentage points faster than pre-pandemic.| theovershoot.co
The latest data on wages suggest that declining job market churn has not been sufficient to normalize the pace nominal income growth.| theovershoot.co
The death and disruption were bound to create real economic losses, even if things are better now than what one might have feared in the spring of 2020. Modest inflation is the least worst outcome.| theovershoot.co
How changes in pre-pandemic estimates of asset income affect the aggregate numbers. Plus, a look at the August PCE inflation numbers.| theovershoot.co
Consumer spending power and underlying price pressures are not yet ticking lower. That is worsening the perceived tradeoff between growth and inflation.| theovershoot.co