The Return of Inflation Fears US inflation fears are back. Therefore, I have decided to revisit and update my favorite inflation forecasting model for the US - the P-star model. In my recent post "Eeny, Meeny, Miny... Panic?", I warned that markets are too optimistic about Fed rate cuts, with the (Theoretical) Mankiw Rule suggesting…

Market Monetarist

18.01.2025

I’m Not Panicking About US Debt, I’m Just Breathing Into This Paper Bag | The Market Monetarist

A slightly nervous look at America's financial future The Story So Far: Everything is Fine(ish) In recent days, I have been asked to write about public debt in the USA. So here we go… If we start by looking at the development of the public finance deficit, we can see from the first graph that…

Market Monetarist

19.01.2025

Fed gets it right: Central banks should do monetary policy, not climate policy | The Market Monetarist

The idea that central banks should conduct "climate policy" is fortunately dying out. I say fortunately because central banks essentially have only one instrument - how much money they create - and that instrument can only be used for one thing. So if one invents all sorts of tasks, one sets aside the main task…

Market Monetarist

20.01.2025

Trump Optimism or Tariff Fears? The Curious Case of the January Philly Fed Surge | The Market Monetarist

A Record-Breaking January Jump Last Friday, we got the January Manufacturing Business Outlook Survey from the Philadelphia Fed, and to say the numbers were eye-popping would be an understatement. The data, collected from January 6 to January 13, showed such a remarkable turnaround in manufacturing activity that it demands closer scrutiny - particularly given the…

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P-Star Reloaded: Trump’s Tariffs, Powell’s Policy, and Inflation’s Next Act | The Market Monetarist

I’m Not Panicking About US Debt, I’m Just Breathing Into This Paper Bag | The Market Monetarist

Fed gets it right: Central banks should do monetary policy, not climate policy | The Market Monetarist

Trump Optimism or Tariff Fears? The Curious Case of the January Philly Fed Surge | The Market Monetarist

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