China's Depression and the U.S. Inflation Outlook

Conflicting Signals in the Strong Jobs Data

There Is No "Reverse Conundrum" Driving Up Bond Yields

Fed Officials Really Don't Want a Downturn

Inflation and the Job Market are Sending Conflicting Signals

The Chicago Fed's Austan Goolsbee on Inflation, the Stance of Monetary Policy, the "Field Guide to R-Star", Managing Supply Shocks, and More

Will Trump's Win (Eventually) Lead to *Lower* Long-Term Interest Rates?

Christopher Waller on Wages, Productivity, and Inflation

The U.S. Economy Is Not Slowing Down: That is not a problem, but it has implications for inflation and interest rates. Plus: inside the September 2024 NIPA revisions.

U.S. Inflation Is Still Hotter than Pre-Pandemic. And that's Okay.: Underlying measures of prices are still rising about one percentage point or so faster than they were in 2017-2019. But there is nothing wrong with this new normal, even if may not be fully priced in.

The Case for Huge Fed Rate Cuts Up Front (And Maybe Some Hikes Later): The goal should be getting to "neutral" as quickly as possible. Since no one knows where that is, optimal policy should consist of moving down quickly while preserving the option to correct later.

Deeper Inside the Chinese Consumer Spending Data: The shortfall in household spending since 2019 is massive no matter how you count it.

Chinese Weakness is the Real "China Shock": It has been over a year-and-half since the end of "Covid Zero" restrictions, but domestic demand is still so weak that production is only holding up thanks to exports (dumping?)

The Case for Cutting Rates (or Not) is the Same As It Was Last Year: The most recent data are likely overstating the extent of disinflation, especially given what seems to be happening with goods supply and demand.

The "Strategic Bitcoin Reserve" is an Absurd Idea: It is understandable why BTC owners would want the U.S. government to bid up the price of their assets. That does not make it good policy.

The U.S. Job Market Is Better Than It Looks: There is much less to the rise in joblessness than meets the eye, while annualized wage growth is still running about 1.5 percentage points faster than pre-pandemic.

Strong, But Not Too Hot: The U.S. Economy as of Mid-2024: The latest numbers on growth, inflation, and incomes suggest that the American economy is easing into a steady state growth regime with inflation still slightly faster than the Fed's 2% goal.

How Many Benign Inflation Prints Are Enough?: We should be cautious about overemphasizing the data from May and June

Are Consumers Retrenching?: "Immaculate disinflation" works best if consumer spending rises less than incomes. That may finally be happening.

Mapping Chinese Capital Flight via the Sinaloa Cartel: The U.S. Department of Justice is charging some creative intermediaries for figuring out how to match drug dealers who want to launder dirty money with rich Chinese who want to invest in the U.S.

The Fed Looks Through a Great Inflation Print: After being burned by the unwelcome inflation surprises of the first few months of 2024, they are now justifiably reluctant to be fooled again, even if that means ignoring some encouraging numbers.

The Curious Case of Australia's (Brief?) Current Account Surplus: For decades, Australians spent more than they generated in income, raising finance from abroad to make up the difference. That has reversed dramatically since the end of 2017. But will it last?

Perhaps Wage Growth Isn't Slowing After All?: The typical worker's pay jumped in May even as the number of people working continued to rise briskly. But there are a few signs of slowing in the job market.

Is Consumer Spending Slowing?: Perhaps, but so far this does not yet seem to be showing up as slower inflation. Plus: more on the latest GDP data.

The Inflation Outlook Is Getting Better, But Also Worse?: Services prices might be moderating, but input costs for manufactured goods may be going the wrong way despite weakening consumer demand.