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Inflation is Persistent and Consumers are Flush. Falling Rates Could be Dangerous.
Current income is already rising fast enough to finance broad price increases, with borrowing muted thanks to high rates. Lower rates could lead to…
Sep 14
•
Matthew C. Klein
24
1
U.S. Job Market Still (Surprisingly?) Good. Inflation Risk Is Paramount.
Core measures of labor demand remain strong, while wage growth is holding steady (or re-accelerating). But there are a few pockets of weakness that bear…
Sep 6
•
Matthew C. Klein
21
3
August 2025
What is the Federal Reserve Endgame?
Suborning the central bank will obviously have implications for monetary policy. But the power that could be exercised via regulatory and supervisory…
Aug 30
•
Matthew C. Klein
34
8
The Macro Impact of AI on GDP
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…
Aug 21
•
Matthew C. Klein
42
5
Inflation Is Moving the Wrong Way
Even if we try to "look through" the impact of tariffs, which could be unwise, the inflationary trend remains persistently faster than before the…
Aug 14
•
Matthew C. Klein
37
1
The Job Market Is Strong, Inflation Is Too Fast, and the Government Is Bananas
The current U.S. administration is determined to squander the benign conditions it inherited. Federal Reserve officials were wise to avoid adjusting…
Aug 3
•
Matthew C. Klein
37
2
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…
Jul 29
•
Matthew C. Klein
32
4
The IMF's Unreasonable External Balance Benchmarks
Methodological flaws encourage persistent imbalances and discourage some reasonable responses by governments to protect their citizens.
Jul 26
•
Matthew C. Klein
25
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.
Jul 18
•
Matthew C. Klein
25
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…
Jul 14
•
Matthew C. Klein
18
June 2025
U.S. Inflation Still Robust Even Before Tariff Impact
The risks are skewed in one direction: up.
Jun 16
•
Matthew C. Klein
23
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…
Jun 7
•
Matthew C. Klein
23
1
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