The hottest Monetary Policy Substack posts right now

And their main takeaways

First Principles of Fiscal Policy, with Some of Their Practical Applications

Brad DeLong's Grasping Reality • 123 implied HN points • 22 Feb 25

The Federal Reserve's approach in the 2020s, which involved acting quickly, turned out to be effective. Many people are thankful for the leadership during this time.
Inflation in the early 2020s might not have been bad because it helped avoid a deeper recession and led to a better economy in some ways.
Voters who understood the economy generally supported Democrats, while those who were confused tended to back Republicans. This shows how informed opinions can influence political choices.

Infographics: Centrally Cleared U.S. Treasury Market Flows

Concoda • 178 implied HN points • 13 Jun 25

💰 Finance Market Trends Trading Investments Economy Monetary Policy

The U.S. Treasury market uses a central counterparty to manage trades. This helps ensure that transactions are processed smoothly and securely.
Understanding the flow of money in the U.S. Treasury market is important for seeing how the economy functions. It gives insights into larger financial trends.
Infographics can help simplify complex information about the Treasury market, making it easier to understand for everyone. Visuals often make learning about finance more accessible.

Running on Empty

The Last Bear Standing • 32 implied HN points • 14 Feb 25

💰 Finance Monetary Policy Banking Liquidity Interest Rates Economic Trends

The Federal Reserve's balance sheet reduction is mostly just moving money around rather than actually reducing the money supply. This means the impact on inflation might not be as significant as it seems.
The Reverse Repo Facility, which helps maintain liquidity in financial markets, is running low. As it decreases, there could be less stability in short-term funding.
While some people say the situation is either a disaster or not a problem at all, it's more complex. We might see tighter banking conditions and more market volatility as the Fed continues its quantitative tightening efforts.

Chartbook 348 Dollar-like: eurodollars, crypto and the future of global money.

Chartbook • 1101 implied HN points • 25 Jan 25

💰 Finance Global Economics Cryptocurrency Monetary Policy International Trade

Eurodollars are dollars held and used outside the US, which allow businesses around the world to conduct transactions without relying solely on the US banking system. This system grew because companies wanted to avoid US regulations and sanctions.
Stablecoins, like eurodollars, are dollar-linked assets that facilitate transactions, providing a bridge between cryptocurrency and traditional money. They promise to maintain a value equal to the US dollar, similar to how eurodollars work.
The future of stablecoins may involve replacing eurodollars in global finance, but their stability and growth depend on stronger backing systems and regulatory support to avoid issues that have affected both eurodollars and cryptocurrencies.

Pretty Stable

The Transcript • 59 implied HN points • 28 Oct 24

💰 Finance Economy Consumer spending Monetary Policy Deficits Inflation

The US economy is doing well with steady consumer spending and healthy household finances. People are still buying, even if the growth rate is slower than last year.
There is a strong demand for jobs, especially for those with college degrees. Many companies are looking to hire, but the unemployment rate for skilled positions is still very low.
The upcoming presidential election is creating some uncertainty in the markets. Once it's over, people expect a better outlook for economic policies.

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How to Defend Cash in under 5 Minutes

Altered States of Monetary Consciousness • 637 implied HN points • 31 Jan 25

💰 Finance Currency Economics Digital Payments Monetary Policy

Cash is important to protect against digital payment surveillance and control. Transitioning to a fully cashless society can lead to loss of personal freedom and privacy.
Instead of arguing against the convenience of digital payments, it might be better to present a new perspective on why cash is valuable. Analogies can help get the message across more easily.
Educating others about the risks of a cashless society takes practice. Finding quick, relatable ways to share your views can be more effective than trying to challenge established beliefs directly.

The Transcript Editor's Commentary

The Transcript • 19 implied HN points • 30 Oct 24

💰 Finance Economics Investment Monetary Policy Consumer spending Elections

The economy seems stable and strong, with good consumer spending and low delinquency rates. People are feeling positive about their finances.
Optimism in businesses is growing, especially with recent changes in interest rates. However, for more demand, companies want more rate cuts and easier lending conditions.
The upcoming presidential election is important for the economy. The new president will influence economic policies that could affect the markets for years to come.

The Fed, With No Earnings, Is Taking Us on a Magic Carpet Trip

QTR’s Fringe Finance • 19 implied HN points • 26 Feb 25

💰 Finance Monetary Policy Federal Reserve Economic Theory Government spending

The Federal Reserve is spending more money than it is earning, leading to significant losses. This means they can't send money back to the Treasury, which affects taxpayers.
The Fed's unusual accounting strategy allows them to classify these losses in a way that keeps them operating. This raises questions about how they can sustain this approach in the long term.
People are concerned about the impact of the Fed's spending on inflation and government debt. Many wonder how this will affect the economy and taxpayers in the future.

First Rate Cut + Q&A

DeFi Education • 779 implied HN points • 23 Aug 24

💰 Finance Monetary Policy Inflation Labor Market Interest Rates Economic Trends

The Federal Reserve is making changes to its policies, indicating the economy is shifting. This could affect things like interest rates and inflation.
Chairman Jerome Powell emphasized that they don’t want the economy to cool down too much. This suggests they are looking for a balance between growth and stability.
There is a focus on the labor market and inflation, which are key indicators for the economy. These factors will influence future decisions from the Federal Reserve.

The Transcript Editor's Commentary

The Transcript • 99 implied HN points • 18 Oct 24

💰 Finance Economics Investing Monetary Policy Capital Markets Earnings Reports

JPMorgan and Wells Fargo recently reported stable profits, showing no significant changes in the economy. This suggests that businesses remain steady despite economic shifts.
The Federal Reserve's recent decision to lower interest rates has helped lift capital markets positively.
The effects of monetary policy, like interest rate changes, often take time to show in the economy, explaining why things seem unchanged right now.

Money Market Update

Concoda • 281 implied HN points • 20 May 25

💰 Finance Market Analysis Investment Strategies Economic Trends Monetary Policy Financial Education

Cash is flowing back into the money markets, leading to calmer conditions. This means there's plenty of cash available, which is a good sign.
The recent panel discussions revealed that issues in the market were influenced by trade tariffs and how they affected different types of financial trades. Understanding these factors can help make better investment decisions.
Despite some panic over the Moody's downgrade, experts believe it's not a big deal and the U.S. Treasuries are still a safe bet. Overall, it's a stable time to consider investing in Treasuries.

The Art of Crypto Kayfabe

Altered States of Monetary Consciousness • 1076 implied HN points • 11 Dec 24

💰 Finance Investing Cryptocurrency Markets Economy Monetary Policy

The investment world can be likened to a wrestling league where different assets compete for your money. Each asset has its own story or gimmick to attract investors, just like wrestlers have unique personas.
Bitcoin is often seen as a rebellious fighter trying to challenge the dominance of the US dollar, but it also plays a tricky game of pretending to be both a currency and an investment asset. This duality creates confusion about its true value and purpose.
Like wrestling matches, the market can be influenced by emotions and narratives. The way assets are portrayed and the stories built around them affect how people perceive their worth and make investment decisions.

The "Neutral" Rate and Implications for 30-year Mortgage Rates

CalculatedRisk Newsletter • 38 implied HN points • 18 Feb 25

💰 Finance Economics Investment Mortgage Monetary Policy Market Trends

The neutral rate, which helps determine monetary policy, has increased back to levels seen before the financial crisis. This means current monetary policy might not be restricting the economy as much as previously thought.
Some economists believe that the actual neutral rate is higher than expected, which could indicate that interest rates may not be as high as people fear.
Fed Chair Powell agreed that the neutral rate has risen significantly since before the pandemic, suggesting a change in how we should view economic policy now.

Solving America's Debt Crisis

Contemplations on the Tree of Woe • 2194 implied HN points • 07 Feb 25

🇺🇸 U.S. Politics Debt crisis Fiscal policy Monetary Policy Government spending

The U.S. is facing a serious debt crisis, with over $36 trillion in debt. This situation is dangerous and could lead to major economic problems if not addressed soon.
The national debt has grown dramatically due to various factors like wars, tax cuts, and the COVID-19 pandemic. It’s now out of control and not sustainable.
A proposed solution, the Chicago Plan, suggests that the government should only issue money without debt. This could help eliminate most of the national debt and create a more stable economy.

Lawler: More Ruminations on the “Neutral” Rate of Interest

CalculatedRisk Newsletter • 47 implied HN points • 12 Feb 25

💰 Finance Monetary Policy Interest Rates Economics Federal Reserve Housing Market

The current monetary policy is not tight enough to be called restrictive. This means people can still borrow money relatively easily.
Tom Lawler has discussed the 'Neutral' rate of interest a lot. Understanding this rate helps us know how the economy might react to changes in interest rates.
Recent comments from Fed Chair Powell suggest that the interest rate environment is still being evaluated, which could affect future economic policies.

The Transcript Editor's Commentary

The Transcript • 79 implied HN points • 09 Oct 24

💰 Finance Monetary Policy Market Analysis Economic Trends

The Federal Reserve recently cut interest rates but is now signaling that they may not do it quickly again. This can be seen as a bit disappointing for the markets.
Jerome Powell, the Fed Chair, mentioned they are not in a hurry to make more rate cuts. This message is important for those watching the economy.
Overall, it seems the Fed wants to stay cautious and not rush decisions that could impact the market.

The Fed Has Stopped Pretending that Price Inflation Is Going Away

QTR’s Fringe Finance • 23 implied HN points • 17 Feb 25

💰 Finance Monetary Policy Inflation Interest Rates Economics Government spending

The Federal Reserve recently cut interest rates, claiming confidence in lower inflation, but that confidence seems to have faded. The Fed is now uncertain about its inflation goals.
Inflation remains high, especially for everyday necessities like food and housing, causing consumers to struggle with rising costs. Recent data shows that inflation is not improving as expected.
Instead of lowering interest rates, which may not help ordinary people, the Fed should step back and allow the market to adjust naturally. This could help stabilize the economy and provide better opportunities for regular investors.

Notes on the Macro-Finance Sitch for 2025-01-13 Mo

Brad DeLong's Grasping Reality • 184 implied HN points • 13 Jan 25

💰 Finance Monetary Policy Labor Market Interest Rates

The U.S. labor market is still strong, showing no signs of cooling off. Recently, 256,000 new jobs were added, which is much more than expected.
Inflation in the U.S. hasn't exceeded the Federal Reserve's target since mid-2022, but there's concern it could rise again. The Fed needs to make sure its policies stay neutral to keep inflation in check.
There are worries that the current financial market is overly optimistic. If the expectations for market growth don't pan out, it could lead to a serious economic downturn.

Three reasons the Federal Reserve is likely to cut interest rates soon

Noahpinion • 8647 implied HN points • 03 Feb 24

💰 Finance Economy Interest Rates Inflation Monetary Policy

The U.S. economy is showing strong signs of a soft landing with low unemployment, surging job numbers, high employment rates, and accelerating wages.
Inflation has fallen back to the 2% target, providing a remarkable macroeconomic achievement.
Despite the strong economy, there is speculation that the Federal Reserve might cut interest rates soon due to reasons like accelerating productivity growth.

No, DOGE Checks Wouldn’t Cause Inflation

Economic Forces • 3 implied HN points • 27 Feb 25

💰 Finance Monetary Policy Inflation Government spending Public Policy

Sending out DOGE checks is unlikely to cause inflation. It's because they would probably just raise the price level temporarily, not create ongoing inflation.
The impact of these checks on the economy depends on how spending changes and whether the central bank keeps spending stable.
Whether giving out DOGE checks is a good idea depends on how the saved money could be used instead, like paying off government debt or funding other programs.

The ASOMOCO Top 10 (2024 Edition)

Altered States of Monetary Consciousness • 226 implied HN points • 31 Dec 24

💼 Business Economics Finance Corporate Innovation Monetary Policy

Corporations use simplified interfaces to interact with people, making it easier for us to deal with their complex structures. This can give them a more relatable personality, changing how we perceive them.
Billionaires are often seen as uniquely gifted individuals, but this view overlooks the collaborative efforts of many people that contribute to their success. It's important to understand the collective work behind big achievements.
Surveillance is becoming normalized as companies find new, clever ways to collect our data. They often spin this as a fun experience, making people look forward to sharing their information.

How we could return to the productivity growth of the 1990s

Noahpinion • 4705 implied HN points • 18 Mar 24

💼 Business Productivity Economic Policy Investment Labor Market Monetary Policy

Productivity growth is crucial for controlling inflation, maintaining a stable economy, and improving living standards.
To boost productivity growth, a combination of macroeconomic factors like full employment, investment incentives, and stable supply-side conditions is essential.
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.

All Roads Lead to Inflation

Points And Figures • 746 implied HN points • 28 Oct 24

💰 Finance Inflation Investing Monetary Policy Economic Growth Debt Management

Inflation seems unavoidable and is likely to continue affecting the economy. It doesn't really matter who is in charge politically; the pressure on the markets suggests we're stuck with it.
To manage during inflationary times, investing in commodities and hard assets like real estate may be smart. These investments can help preserve value even when the dollar weakens.
The shift to private markets and sectors like technology and agriculture can offer chances to earn better returns that beat inflation. However, navigating these markets requires skill and good management.

CROSSPOST/HOISTED: Larry Summers from 2022 on the "Polycrisis"

Brad DeLong's Grasping Reality • 84 implied HN points • 16 Jan 25

💰 Finance Monetary Policy Fiscal policy Global Economy Financial Stability Inflation

The global economy is facing a 'polycrisis,' which means there are many problems at once, like inflation, energy issues, and conflicts affecting different regions.
Inflation is a big concern, and controlling it might require tough decisions like raising interest rates, which could lead to higher unemployment but is seen as necessary for stability.
The situation in the UK shows how quickly financial stability can turn into chaos from bad policy, highlighting the importance of credibility and wise fiscal management.

Quick Essay: The Federal Reserve and Critical Moments in U.S. Monetary Policy

Chamath Palihapitiya • 3871 implied HN points • 15 Nov 23

💰 Finance Monetary Policy Federal Reserve Economic History Inflation Financial Crisis

Before the Federal Reserve, the U.S. had banking issues and crises, leading to the need for a central bank in 1913.
The Great Depression prompted key reforms like the Banking Act of 1933 and the Gold Reserve Act of 1934.
The end of the Bretton Woods system in 1971 marked a shift to Fiat currency and the decline of the gold standard.

Gold Surpasses $2900 Per Ounce

QTR’s Fringe Finance • 14 implied HN points • 12 Feb 25

💰 Finance Investing Commodities Markets Economic Trends Monetary Policy

Gold prices hit a new record, surpassing $2,900 per ounce, largely due to economic uncertainty and concerns about inflation. This has made gold an attractive option for many investors.
Trade tensions between the US and China, along with tariffs on steel and aluminum, have pushed global capital towards gold as a safe investment. Countries like China are also building their gold reserves, which supports higher prices.
Despite rising interest rates normally being bad for gold, the current economic landscape and investor fears about inflation are keeping demand strong. Many people see gold as a way to protect their wealth in uncertain times.

The Money Market Blindspot: Part I

Concoda • 508 implied HN points • 23 Jan 25

💰 Finance Market Analysis Monetary Policy Debt Management Economic Trends

A funding squeeze is turning into a big increase in cash availability. This change is happening as market conditions ease, but new issues like the debt ceiling are causing uncertainty.
The financial system has a lot less cash than it had in the past, partly because of changes in how money markets operate. There hasn't been serious funding stress recently, which is a good sign.
Another cash surge is expected to hit the banking system soon. As the Treasury reduces its cash cushion, this could lead to more market volatility down the line.

Money Market Update

Concoda • 443 implied HN points • 01 Feb 25

💰 Finance Market Analysis Investment Strategies Monetary Policy Economic Trends Liquidity management

The Federal Reserve is continuing its balance sheet reduction to avoid financial crises, with expectations of it ending by June.
The U.S. Treasury might reduce its issuance of short-term bills to save costs, especially if the Fed maintains its current policies.
Despite challenges like a strong dollar and global tensions, risk assets are anticipated to perform better than bonds in the near future.

In a Perfect World, Powell Would Not Be Fed Chairman and Trump Would Be President

Peter Navarro's Taking Back Trump's America • 2397 implied HN points • 08 Mar 23

🇺🇸 U.S. Politics Economy Monetary Policy Political History Presidency Federal Reserve

In a perfect world, Peter Navarro believes Jerome Powell wouldn't be the Fed Chairman and Trump would still be the President.
Navarro discusses how Mnuchin convinced Trump to appoint Powell, who in turn negatively impacted the economy.
Navarro criticizes Powell's policies and highlights the challenges of dealing with stagflation and the Federal Reserve's limitations.

The "worst possible outcome" for the Fed is an unnecessary recession, not reversing a cut

Stay-At-Home Macro (SAHM) • 1238 implied HN points • 24 Jan 24

💰 Finance Monetary Policy Inflation Interest Rates Unemployment Economy

The Fed's main concern is avoiding an unnecessary recession, not reversing a rate cut.
Inflation has decreased, but the Fed is hesitant to cut rates due to fears of inflation resurgence.
The Fed should balance its mandate of stable prices and maximum employment to avoid causing an unnecessary recession.

Stepping on the same rake.

A Havenstein Moment. • 1041 implied HN points • 06 Feb 24

💰 Finance Quantitative Easing Monetary Policy Federal Reserve Economy Debt

Anecdotes often hold truth when data and anecdotes disagree.
Quantitative easing can have significant consequences on society.
Protecting the wealthy can lead to extreme actions from those in power.

Easing Into Expansion

The Last Bear Standing • 24 implied HN points • 17 Jan 25

💰 Finance Monetary Policy Inflation Economic data Market Trends

Inflation is complex and influenced by many factors, making it hard to pinpoint why prices change. It often feels like a guessing game without clear answers.
The market reacts strongly to data on inflation, analyzing numbers intensely, but sometimes it loses sight of the bigger picture, like underlying economic trends.
Current monetary policies have shifted, and while they initially helped reduce inflation, signs suggest that prices may be climbing again as the economy changes.

Money Market Update

Concoda • 405 implied HN points • 19 Jan 25

💰 Finance Market Update Monetary Policy Debt Management Investment Strategies

The upcoming U.S. presidential inauguration and a new Treasury Secretary may lead to changes in the money market. This could create opportunities for profits.
The debt ceiling issue is affecting liquidity and will lead to market volatility. When resolved, it will change the flow of money in the markets.
Foreign investors are becoming more interested in U.S. Treasuries due to better returns. This could impact how these markets operate in the near future.

Media Notes

The Lens • 982 implied HN points • 22 Jan 24

💰 Finance Economics Monetary Policy Inflation Interest Rates Debt

Stephanie Kelton discusses alternative ways to handle inflationary pressures globally
Central banks turning to rate hikes may not be the most effective solution for managing inflation
Raising interest rates can have unintended consequences and may not always lead to desired outcomes

Sacred Cows

The Lens • 904 implied HN points • 27 Jan 24

🇺🇸 U.S. Politics Economics Federal Reserve Inflation Monetary Policy Public Perception

Economists, market participants, pundits, and policymakers got some big things wrong in recent years, like the transitory nature of inflation.
The public perception of elites may be that they often know nothing, even elites admit to being wrong on significant matters.
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.

The Year-End Money Market Storm

Concoda • 464 implied HN points • 19 Dec 24

💰 Finance Market Trends Investment Strategies Monetary Policy Financial Instruments Risk management

Demand for funding is very high right now, causing banks to struggle. This could lead to big changes in money markets by the end of the year.
Many traders are looking for ways to finance their stock trades, leading to more activity in repo markets. This means borrowing money using stocks as collateral is becoming common.
There's a big challenge with U.S. government debt right now. The banks need to buy up a lot of unwanted debt at a time when borrowing money is getting tougher.

The Fed is only looking to past inflation, and that's a problem.

Stay-At-Home Macro (SAHM) • 805 implied HN points • 09 Feb 24

💰 Finance Monetary Policy Inflation Economy Federal Reserve Data-driven

The Fed is focusing only on past inflation, and this approach may lead to problems with monetary policy decisions.
Recent data shows a rapid decrease in inflation over the past six months, suggesting a return towards the 2% target.
Despite strong economic growth and high interest rates, the Fed continues to rely heavily on backward-looking inflation data for its decision-making.

Market Misreads Services Inflation And the BOJ

Japan Economy Watch • 1018 implied HN points • 04 Jan 24

💰 Finance Market Analysis Inflation Central Banks Economic data Monetary Policy

Market players and forecasters may be misreading the intentions of the Bank of Japan (BOJ) about inflation and wage data.
The BOJ's ambiguous messages and contradictory statements are causing confusion in the market.
Evaluating services inflation and wage hikes requires careful consideration of data and not jumping to conclusions.

When we lost our minds: Pt. 5 The Lessons Leamer Learned

Erdmann Housing Tracker • 105 implied HN points • 13 Dec 24

🇺🇸 U.S. Politics Economics Public Policy Housing Monetary Policy

Housing is really important to the economy. It helps predict how the economy will do and often drives changes in it.
The best time to step in and control the housing market is when construction is happening a lot and above normal levels. Waiting too long can cause problems.
In areas like Los Angeles, even though people think there are too many homes, the reality is that many people are affected by rising rents and low construction rates.

Fischer Black vs. Monetarism

In My Tribe • 455 implied HN points • 14 Dec 24

💰 Finance Monetary Policy Economic Theory Inflation Market Dynamics Financial Systems

Fischer Black believed that both money supply and price levels are based on collective beliefs rather than strict numbers. People accept money because they trust others will accept it too.
Inflation and prices are influenced more by market behavior and expectations rather than solely by money supply. This means prices can change based on what people think will happen in the future.
The relationship between money and prices might be less reliable than before. As people use less cash and more digital forms of payment, traditional ways to predict inflation might not work well anymore.