The Overshoot

The Overshoot

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July 2025

The U.S. Is Not "Winning the Trade War"
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…
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Matthew C. Klein
4
The IMF's Unreasonable External Balance Benchmarks
Methodological flaws encourage persistent imbalances and discourage some reasonable responses by governments to protect their citizens.
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Matthew C. Klein
1
Inflation, Trump, and the Fed
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.
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Matthew C. Klein
3
How Türkiye Pulled It Off (-ish)
Policy tightening helped reduce inflation, stabilize the currency, and improve the country's fragile financial position. But Turks are still worse off…
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Matthew C. Klein

June 2025

U.S. Inflation Still Robust Even Before Tariff Impact
The risks are skewed in one direction: up.
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Matthew C. Klein
1
The U.S. Economy Does Not Need Lower Interest Rates (Yet)
The latest data available on the job market, inflation, and business sentiment all suggest that the current constellation of interest rates is broadly…
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Matthew C. Klein
1
How Credible Is the 2025Q1 GDP Decline?
Inventory accumulation is almost certainly being undercounted. Data center investment may also be undercounted. But there was still a substantial…
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Matthew C. Klein

May 2025

This is What Normalization Looks Like (Mostly)
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…
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Matthew C. Klein
7
Exorbitant Privileges, Burdens, etc. and the Implications for Fiscal Policy
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…
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Matthew C. Klein
3
China's Edge in the "Trade Struggle" is More Theoretical than Real
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…
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Matthew C. Klein
5

April 2025

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