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The August Consumer Price Index surprised to the upside, ramping up expectations for another aggressive Federal Reserve rate hike. It also reveals a big problem for the Fed that most people haven’t come to grips with yet.
What happens if the Federal Reserve loses money? The Fed typically earns interest income from all of the bonds it holds on its balance sheet. It also collects fees for services that it provides. Most of any Fed operating profit is remitted to the US Treasury under federal law. That money becomes part of the […]
It appears somebody at the Federal Reserve has figured out that the central bank can’t tame inflation, so it’s setting up a scapegoat – Uncle Sam. A paper co-authored by Leonardo Melosi of the Federal Reserve Bank of Chicago and John Hopkins University economist Francesco Bianchi and published by the Kansas City Federal Reserve argues that […]
President Joe Biden recently announced a student loan forgiveness program. While it will provide some people a small amount of relief from student loan debt, this $300 billion taxpayer-funded scheme does nothing to address the underlying problem. In fact, it will exacerbate it. The underlying problem is the high cost of a college education.
An audacious communications campaign from Democrats in Washington is currently underway that is attempting to convince the public that: There is no recession Inflation has been vanquished Even if inflation is still alive, targeted new Federal legislation will kill it
The central bankers at the Federal Reserve continue to talk tough about fighting inflation. But is it a fight they can win? The numbers say no.
The mainstream has suddenly discovered price movements impact retail sales. For months, retail sales generally came in higher than expected. And for months the mainstream financial punditry ignored inflation and told us this signaled a strong economy. But in July, retail sales unexpectedly fell flat. Now the mainstream financial punditry claims this signals a strong […]
Fifty-one years ago this week, President Richard Nixon slammed shut the “gold window” and eliminated the last vestige of the gold standard. Nixon ordered Treasury Secretary John Connally to uncouple gold from its fixed $35 price and suspended the ability of foreign banks to directly exchange dollars for gold. During a national television address, on […]
The US government is addicted to spending money. And the Federal Reserve is Washington DC’s pusher. When we talk about inflation, we usually focus on money creation by the Fed. After all, that is the definition of inflation. But the Fed has to keep creating money in order to monetize the massive federal deficit. And […]
Cooling Consumer Price Index data did not cool the hot rhetoric coming from some Federal Reserve members. The question is whether this is a bunch of hot air or do these central bankers actually have the fortitude to move forward with rate hikes in the face of a sinking economy?
