The hottest Monetary Policy Substack posts right now

And their main takeaways
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Noahpinion β€’ 4705 implied HN points β€’ 18 Mar 24
  1. Productivity growth is crucial for controlling inflation, maintaining a stable economy, and improving living standards.
  2. To boost productivity growth, a combination of macroeconomic factors like full employment, investment incentives, and stable supply-side conditions is essential.
  3. Three key factors that fostered productivity growth in the 1990s were full employment, high fixed investment, and stable supply with low inflation; replicating these conditions today would require strategic policy interventions.
Noahpinion β€’ 8647 implied HN points β€’ 03 Feb 24
  1. The U.S. economy is showing strong signs of a soft landing with low unemployment, surging job numbers, high employment rates, and accelerating wages.
  2. Inflation has fallen back to the 2% target, providing a remarkable macroeconomic achievement.
  3. Despite the strong economy, there is speculation that the Federal Reserve might cut interest rates soon due to reasons like accelerating productivity growth.
Chamath Palihapitiya β€’ 3871 implied HN points β€’ 15 Nov 23
  1. Before the Federal Reserve, the U.S. had banking issues and crises, leading to the need for a central bank in 1913.
  2. The Great Depression prompted key reforms like the Banking Act of 1933 and the Gold Reserve Act of 1934.
  3. The end of the Bretton Woods system in 1971 marked a shift to Fiat currency and the decline of the gold standard.
Stay-At-Home Macro (SAHM) β€’ 1238 implied HN points β€’ 24 Jan 24
  1. The Fed's main concern is avoiding an unnecessary recession, not reversing a rate cut.
  2. Inflation has decreased, but the Fed is hesitant to cut rates due to fears of inflation resurgence.
  3. The Fed should balance its mandate of stable prices and maximum employment to avoid causing an unnecessary recession.
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Stay-At-Home Macro (SAHM) β€’ 805 implied HN points β€’ 09 Feb 24
  1. The Fed is focusing only on past inflation, and this approach may lead to problems with monetary policy decisions.
  2. Recent data shows a rapid decrease in inflation over the past six months, suggesting a return towards the 2% target.
  3. Despite strong economic growth and high interest rates, the Fed continues to rely heavily on backward-looking inflation data for its decision-making.
Concoda β€’ 264 implied HN points β€’ 11 Mar 24
  1. The Repo Market is undergoing significant changes, with a shift to a secured monetary standard and challenges in the system prompting new adaptations.
  2. The Repo Market has become more systemic and fragmented, with different regions defined by various participants, securities, and settlement methods.
  3. The presence of triparty and interdealer markets within the Repo Market highlights the importance of central clearing in reducing risks and enhancing liquidity among major financial players.
The Lens β€’ 904 implied HN points β€’ 27 Jan 24
  1. Economists, market participants, pundits, and policymakers got some big things wrong in recent years, like the transitory nature of inflation.
  2. The public perception of elites may be that they often know nothing, even elites admit to being wrong on significant matters.
  3. There was a discussion on the impact of rate hikes on inflation, challenging the traditional narrative and the idea that monetary policy has no effect.
Concoda β€’ 513 implied HN points β€’ 13 Feb 24
  1. The Federal Reserve's Bank Term Funding Program (BTFP) is expiring after being used to address financial panic and market stimulation caused by banks' underwater assets.
  2. Following a series of bank failures in the aftermath of COVID-19's speculative boom, the Fed introduced the BTFP to provide a confidence boost and stabilize markets.
  3. The BTFP evolved into a risk-free arbitrage opportunity for banks, leading to its rapid increase in volumes before its sudden discontinuation in March 2024.
Brad DeLong's Grasping Reality β€’ 153 implied HN points β€’ 08 Mar 24
  1. Many were surprised by the current interest-rate situation in the US, with rates significantly higher than expected.
  2. Market changes in 2022 led to a drastic increase in long-term real safe interest rates, signaling shifts in Federal Reserve policy.
  3. The current interest-rate configuration, considerably higher than anticipated, raised concerns about a looming recession among experts.
The Bitcoin Layer β€’ 412 implied HN points β€’ 26 Jan 24
  1. The Fed made minor adjustments to monetary policy recently, ending certain borrowing and investing practices in banks.
  2. The Fed is preparing banks for potential crises by encouraging them to use existing facilities like the discount window.
  3. Financial stability is a concern due to leveraged banks and risky lenders of last resort, indicating underlying instability in the financial system.
Off to Lunch β€’ 334 implied HN points β€’ 01 Feb 24
  1. The Bank of England decided to keep interest rates at 5.25%, despite a split vote among committee members.
  2. Inflation is still high in the UK at 4%, above the Bank's 2% target, but recent data suggests a slowdown in the economy.
  3. The Bank's monetary policy report hints at inflation potentially dropping to 2% in the near future, but interest rates may not be cut until sustained evidence is seen.
Erdmann Housing Tracker β€’ 42 implied HN points β€’ 19 Mar 24
  1. Consider using NGDP growth to communicate monetary policy instead of targeting inflation with short term interest rates.
  2. The yield curve's dynamics indicate recessionary signals and potential rate cuts by the Fed.
  3. Economic growth predictions for 2024 suggest low inflation, steady GDP growth, and a possible decrease in target rates by the Fed.
Brad DeLong's Grasping Reality β€’ 161 implied HN points β€’ 06 Feb 24
  1. The US Federal Reserve is hesitant to adjust its policy interest rate despite the economy being in balance.
  2. The Fed remains cautious about aligning rates with the neutral rate due to uncertainties in the economic outlook and inflation risks.
  3. The announcement of maintaining the federal funds rate range at 5.25-5.5% raised concerns given the already balanced US macroeconomy.
Peter Navarro's Taking Back Trump's America β€’ 2397 implied HN points β€’ 08 Mar 23
  1. In a perfect world, Peter Navarro believes Jerome Powell wouldn't be the Fed Chairman and Trump would still be the President.
  2. Navarro discusses how Mnuchin convinced Trump to appoint Powell, who in turn negatively impacted the economy.
  3. Navarro criticizes Powell's policies and highlights the challenges of dealing with stagflation and the Federal Reserve's limitations.
Erdmann Housing Tracker β€’ 126 implied HN points β€’ 06 Feb 24
  1. Accidentally testing market monetarism, particularly nominal GDP targeting, yielded successful results during economic shocks.
  2. Nominal GDP targeting can help stabilize the business cycle by allowing for counter-cyclical inflation and smoothing disruptions in nominal incomes.
  3. Adopting nominal GDP level targeting could lead to improved productivity and reduced reliance on interest rates in monetary policy discussions.
Chartbook β€’ 1745 implied HN points β€’ 29 May 23
  1. The era of Bretton Woods had a complex history and its implications for today's economic policy are significant.
  2. Historical narratives like Bretton Woods can be used to legitimize and motivate action, but may not always align with reality.
  3. Understanding the continuous process of policy-making improvisation without succumbing to its complexities is crucial for shaping economic policy.
Ironsides Macroeconomics 'It's Never Different This Time' β€’ 137 implied HN points β€’ 27 Jan 24
  1. The FOMC meeting and the Treasury's Quarterly Refunding Announcement are key events affecting policy and market reactions.
  2. Investors are closely watching for details on rate cuts, balance sheet reduction, and labor conditions.
  3. The upcoming employment report could impact policy decisions, especially in relation to labor demand and supply.
Global Markets Investor β€’ 39 implied HN points β€’ 07 Mar 24
  1. The US national debt has reached a record $34.5 trillion, increasing by $1 trillion every 100 days since June. This high level of debt poses challenges for the government and future generations.
  2. The US debt-to-GDP ratio is currently at 123.7%, near the all-time high. A high ratio decreases a country's ability to pay back debts and could lead to default or inflation-adjusted losses for investors.
  3. A country with a debt-to-GDP ratio above 130% historically has a high probability of default. High debt levels can limit future investments, impact economic growth, and reduce flexibility in responding to crises.
Global Markets Investor β€’ 19 implied HN points β€’ 21 Mar 24
  1. The Federal Reserve kept interest rates steady at 5.50% and foresees 3 cuts in 2024. First cut likely in June despite some inflation increase.
  2. The Fed plans to slow down the balance sheet reduction pace in the upcoming year, affecting market movements positively.
  3. Market reaction to the Fed's decisions saw all-time highs for stocks and gold, with bonds and cryptocurrencies rallying, and a drop in US dollar and VIX index volatility.
Erdmann Housing Tracker β€’ 63 implied HN points β€’ 14 Feb 24
  1. Reaction to monthly CPI updates often fails to consider the lag affecting the shelter component, leading to surprises in news interpretation.
  2. Market expectations of a Fed rate cut were influenced by the latest report, shifting them further in the future.
  3. Monetary measures like currency in circulation and M2 trended down post-Covid scare, while the Fed's balance sheet shrinks without obvious disruption.
Pekingnology β€’ 71 implied HN points β€’ 06 Feb 24
  1. Yi Gang discussed the historical significance of Jiaozi, the first paper money, and its implications for currency policies
  2. He emphasized the importance of competition under constraints for a successful monetary system
  3. Yi Gang highlighted the necessity of establishing and enhancing modern central bank systems to maintain currency stability
The Informationist β€’ 1257 implied HN points β€’ 26 Mar 23
  1. BTFP is a program by the Fed to provide liquidity to underfunded banks facing large customer withdrawals.
  2. Banks can borrow against securities like U.S. Treasuries with no haircut and at a low cost.
  3. BTFP offers a sweetheart deal to banks, providing liquidity without stigma of borrowing from the Discount Window.