For those old enough to have debated Abenomics in the 2010s, below is a figure of what it did for nominal demand. I discussed Abenomics with @birdyword.bsky.social on the podcast this week and also in my newsletter: macroeconomicpolicynexus.substack.com/p/a-macroeco...

Also, per @tracyalloway.bsky.social, the real discussions at Jackson Hole this week will be about Fed independence. Some may invoke independence definitions (1) and (2) below in their conversations, but I think (4) is the real concern as I explain here: shorturl.at/Je7zB (2/2)

Here is a behind-the-scenes extra where we had some fun with one of Peter's other passions in life: (2/n)

Ran into my favorite @ecb.europa.eu official at the Hoover monetary policy conference! @isabelschnabel.bsky.social

No better way to prepare for "Liberation Day" then to have @scottlincicome.bsky.social help you make sense of the trade war on the pod www.mercatus.org/macro-musing... and then follow up with my newsletter. macroeconomicpolicynexus.substack.com/p/trade-wars...

“As the saying goes, if you pick up one end of the stick, you pick up the other,” Peter Conti-Brown, professor at the Wharton School of the University of Pennsylvania, said. “The Fed is a single stick.” www.semafor.com/article/02/2... @petercontibrown.bsky.social

Since the FOMC is likely to make big changes to the framework, here are my proposed changes. Motivation found here: www.mercatus.org/research/pol... (3/4)

A bit early, but RIP FAIT... (2/4)

Okay, it's all but official: FAIT is likely to become FIT. From the January FOMC minutes.(1/4) @nicktimiraos.bsky.social @colbylsmith.bsky.social @vtg2.bsky.social @hpschneider.bsky.social

Preview of next week’s show with @stevenkelly49.bsky.social where we discuss the Treasury equity funding model of the Fed’s 13(3) facilities. Also some DW updates.

Trump CEA Chair Steve Miran and Treasury Chief of Staff Dan Katz are two former podcast guests. Congrats to both of them on their new roles! In this episode, we discussed their paper on structurally reforming the Fed. Might be a useful time to review it. www.mercatus.org/macro-musing...

So how would I change the FOMC's consensus statement? Something along the following lines:

Addendum: here is the full Gallup Poll image.

Finally, Google searches for inflation have also come down from their peak but remain at a new higher level. This is another sign that the public is now 'once bitten, twice shy' when it comes to inflation. Tariffs might catalyze these lingering worries. (5/5)

As an aside, this lingering inflation unease is not only a worry in the United States but also around the world. It remains elevated despite coming down. Easy to imagine new tariffs adding to the inflation worries (4/5)

Second, even though inflation has come down from being the most important problem in many polls, it still remains an elevated concern. It never completely went away. (3/5)

First, even though consumer inflation expectations have fallen from the highs of 2022 there is greater uncertainty around those expectations than before. (2/5)

The Feds framework review begins at this week’s FOMC meeting. What will be the fate of FAIT? We discuss one alternative on the pod this week www.mercatus.org/macro-musing... (1/3)

You know what this means for monetary policy?

Never forget that Mark Carney almost brought NGDP targeting to the BoC and the BoE! Maybe he can take time from his campaign to say a good word for NGDP targeting at the Fed's framework review! We chatted about his NGDP targeting push on the pod back in 2021 www.mercatus.org/macro-musing...

This implies the CBO's potential real GDP estimates out later this week may not be as high as anticipated and, in turn, indicate the economy may be running above potential. Put differently, the current CBO positive output gap may not be revised down as much as expected.

Our EOY episode where my podcast producer, Sam Alburger, and I have some fun and talk serious economic policy. Here we do the former given my love of basketball. Guess who is my six man off the bench for my econ basketball team? Full transcript and audio here: www.mercatus.org/macro-musing...

This week's podcast with George Selgin is a holiday gift with something for everyone! For crypto skeptics there is an epic takedown of the SBR; for crypto enthusiasts we cover chokepoint 2.0; and for monetary policy fans we discuss the framework review! Transcript: www.mercatus.org/macro-musing...

Former Fed President Jeff Lacker and I talked about similar calls to remove bank regulatory duties from the Fed. The big problem with such calls: the Discount Window (DW). Fed needs bank supervisory ability to successfully implement the DW. Full discussion here www.mercatus.org/macro-musing...

Delighted to have Ellen Correia Golay of the NYFRB join the show to discuss her work on the U.S. Treasury market. We discuss the challenges facing treasuries, her work on the IAWG report, recent reforms, and more! In this clip, we discuss Fed-Treasury interactions. Full show: tinyurl.com/5n8szw8f

Update on Series I savings bonds that adjust for inflation and became popular during the inflation surge.

I can't answer all your questions, but I also can't ignore polls, actual real earnings data, and other studies that show inflation was important. For example: papers.ssrn.com/sol3/papers....