The Overshoot

The Overshoot

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Thoughts from the Past Two Weeks
The limits of U.S.-China decoupling, the principled case for an American industrial renaissance, and the scope for (desirability of?) capital flight…
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Matthew C. Klein
2
How to Think About the Tariffs
This is bad policy, executed thoughtlessly. But it is worth thinking through exactly *why* it is bad.
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Matthew C. Klein
3
Trying to Parse the pre-"Liberation Day" Wage/Inflation Dynamics
Goods inflation was already accelerating while job churn had stopped falling. Also: watch out for upward revisions to healthcare inflation.
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Matthew C. Klein

March 2025

The Fed Tries to Thread the Stagflation Needle
By doing exactly what they were planning to do before, at least for now.
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Matthew C. Klein
2
Inside the BTFP Subsidy
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…
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Matthew C. Klein
The Atlanta Fed's Nowcast Is Broken (For Now)
Imports of gold bars turn out to be surprisingly important. Plus: some thoughts on the February jobs numbers.
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Matthew C. Klein
1
The U.S. Chooses Stagflation
Policy choices over the past six weeks risk pushing a previously strong economy into a world of faster inflation and slower real growth.
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Matthew C. Klein
The Europeans Should Give Russia's Reserves to Ukraine Now
An accounting gimmick that is appropriate for the seriousness and stupidity of the times.
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Matthew C. Klein
3

February 2025

Time Is Only on the Russians' Side If We Give It to Them
The Putin regime's eagerness for a quick deal is itself indicative of the country's tenuous position.
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Matthew C. Klein
1
U.S. Inflation Chugs Along. But Watch Out for Goods.
The January pop in the CPI was comparable to what happened last year, although some of the underlying services numbers are more encouraging. But goods…
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Matthew C. Klein
Contra Krugman on Current Account Controversies
The surpluses of Edwardian Britain were not benign and should not be used to justify similar surpluses in Japan, Germany, and elsewhere.
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Matthew C. Klein
3
Trump or No Trump, 2% Inflation Was Not Coming Any Time Soon
Prices were failing to decelerate even before there were concerns about tariffs and other disruptive policies thanks to robust income growth and…
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Matthew C. Klein
© 2025 Matthew C. Klein
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