Category Archives: Federal Reserve

Is there a danger that the Fed will fall behind the inflation curve?

Both Macroblog and Capital
Spectator
raise the prospect today that rising long-term yields might mean that the Fed
waited too long before trying to stamp out the cinders of an incipient inflation fire. I would
suggest instead that the increase in long-term yields over the last few months is the natural
development that we expect to see in a situation of Fed tightening and has little to do with
inflationary expectations.

Continue reading

Babble about a housing bubble

There’s been much discussion recently of whether the U.S. is experiencing a speculative bubble in house prices. Like previous historical bubble sightings, this one only seems to pop up in situations where the fundamentals on their own might justify significant price increases.

Continue reading