This year’s Nobel in economics goes to Robert Hall and Michael Woodford. Between them they built the model every central bank now runs:

Kevin Warsh has been a hawk, a dove, a dissenter who voted yes, and now a chairman who will not say what he is aiming at.

The American debt is usually discussed as a number — $40 trillion — and as a moral failing.

Michael Woodford’s Interest and Prices is 23 years old. It won the debate. The question is whether the debate was the right one.

Scott Sumner says NGDP targeting is “usefully wrong.” He is right. But the useful part is doing the heavy lifting.

The economy added 29,000 jobs in Sept, against expectations of 85,000. July was revised to negative, unemployment rose to 4.2 percent, and hourly earnings grew at their slowest pace since 2021.

Austan Goolsbee told an OMFIF audience in London last week that the central banking habit of looking through supply shocks may have reached its limits.

In April 2011 I wrote a post responding to Brad DeLong’s “Anatomy of a Slow Recovery.” His argument was that the pace of a recovery depends on what caused the downturn.

Robert Armstrong asked the right question in Unhedged: Warsh keeps gesturing at monetarism, so which monetary aggregate does he mean?

A new Chicago Fed Letter argues that whether AI-driven productivity growth calls for higher or lower interest rates depends on whether the gains are anticipated.

Readers occasionally ask why a post about tariffs, or the AI capex boom, or the debt ratio, always seems to end up at the Federal Reserve.

Vincent Geloso has written a piece warning that the American left and right are competing to control the economy, and that this reproduces the dynamic which hollowed out Chilean democracy before 1973.

The Fed raised rates today for the first time since 2023, to 3.75–4.00 percent, and Warsh promised a “timelier return” to 2 percent inflation.

The August CPI landed on Friday and settled next week’s meeting in the market’s mind within about ninety seconds. Headline at 3.4 percent, core at 2.4,

He cited a strong jobs report as grounds for cutting. He threatened to stop trading with the countries that buy the debt, in order to lower the yield on the debt.

Katharina Pistor argues that the Fed and the Treasury are in denial about their own role — that they are not referees standing outside the market but players who constitute it,

Warsh spent a passage of his Jackson Hole speech warning that markets should not be “looking primarily to the Fed for their next trade.”

Warsh gave the Jackson Hole speech on Friday. It is a serious document — better than the July statement by a wide margin,

Four weeks ago he wanted to use the speech for big, lofty ideas rather than the tactical details of what the Fed does at its three remaining meetings.

John Rutledge argues that the deficit will not push interest rates up, because household net worth grows about seven percent a year,

Every account of how American debt reached $40 trillion explains the numerator. None of them explains the denominator — which has done real damage, is currently doing the opposite,

“Everywhere we turn the collection of corrupt incompetents in the Trump admin is screwing up something new

Another trip to the not so distant past featuring the NGDP Level Target alternative

Krugman argues there is no impending debt crisis, that $40 trillion is a round number without special significance, and that Democrats should not let deficit scolds block a progressive agenda in 2029

Why doubling bond buybacks won’t fix the real problem

Eleven years later the 2 percent target is still sacrosanct

Mark Blyth and Nicolò Fraccaroli argue that inflation has many causes — supply shocks, pricing power, money — and that a world of climate shocks & others is entering an age of supply-driven inflation.

The Vice President thinks reserve currency status is a curse. He may even be half right. He is also describing the thing the Treasury Secretary spent a weekend protecting.

Retail sales fell 0.6% in July, the steepest drop since May 2025 and well short of the 0.1% gain expected.

CPI came in soft. Real wages went backward. Only one of those made the headlines.

Kevin Warsh thinks the Fed has a data problem. It has a commitment problem.

Robert Brusca has made the best defence of Warsh’s silence I have read. Markets don’t just want the hypothetical rule, he says — they want the Fed’s read of the economy now...

The payroll data and the yield curve are no longer telling different stories. They are telling the same one.

The Philly Fed president has written the most candid thing any policymaker has published this year.

John Cochrane has a new post on whether Warsh should raise rates, and its central claim is one I largely accept: there is nothing mechanical about higher interest rates lowering inflation.

Robert Lighthizer wants a trade order built on balanced trade, with surplus countries penalised.

The data tells a different story

Warsh held rates, changed one word in the statement, and told a forty-five-minute press conference almost nothing.

In September 2010 I asked the Fed to promise to return nominal demand to a path and not rest until it got there. Sixteen years later the request has been granted, misapplied, and repealed.

The July FOMC statement is the shortest in years and says almost nothing. That is the point of the new regime.

Cochrane’s fiscal theory, Warsh’s resolve, Nelson’s autopsy of M2, the longhorn and the overshoot — every argument in the recent posts has ended at the same place, a nominal GDP level path.

The 30-year has sat above 5% for the longest stretch since 2007. That number is a verdict — on inflation credibility, on the fiscal path, and on the missing nominal anchor.

Warsh spent part of his testimony hunting for a superior inflation gauge — trimmed means, medians, a new measure of what a big-box retailer charges for a good.

Kevin Warsh went before Congress today and promised, flatly, that the inflation of the last five years “will be a thing of the past.” A soft June CPI print handed him the moment.

How indebted governments quietly make you pay — without a vote, and without you noticing.

The new chairman has handed his monetary-policy review to five outside task forces and fifteen co-leaders.

The last chapter of Cochrane’s book takes its victory lap, then turns to the future: better instruments, better rules, better commitments.

Chapter 5 sends the fiscal theory through a century of episodes. Enter the theory he left out of Chapter 4’s tournament and run it over the same course, and the episodes don’t refute it.

Cochrane runs five theories of inflation through clean experiments, and the fiscal theory wins. But there is a sixth theory, missing from his lineup, that fits those experiments at least as well.