Monetary Policy
By minimizing the harm caused by recessions and high inflations, monetary policy can promote economic stability and create an environment in which individuals and businesses prosper and thrive. In pursuit of these goals, Mercatus research shows why and how the Federal Reserve should (a) follow a rules-based approach to making policy, (b) increase its transparency and accountability to the public, and (c) better utilize market signals.
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Latest Work in Monetary Policy
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Today’s Fed Decision on Interest Rates | MSNBC's "Meet the Press Now"
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The Fed Has Overseen a Remarkable Transfer of Wealth From Bondholders to Taxpayers | Barron's
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- | Expert Commentary Expert Commentary
It’s Time for the Fed to Take a Breath | National Review
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- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Steven Kelly on the Silicon Valley Bank Collapse and Its Implications for Financial Policy
As the Fed and regulators deal with the Signature and Silicon Valley Bank failures, the future of financial stability policy now hangs in the balance.

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- | Expert Commentary Expert Commentary
The Role of Sound Monetary Policy in an Abundance Agenda | Discourse
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Skyrocketing National Debt | American Radio Journal
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- | Podcast Appearance Podcast Appearance
The Failure of SVB | American Radio Journal
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- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Derek Tang on the Present and Future Landscape for Fed Policy and Politics
From personnel changes to the next framework review, the Fed has a lot on its plate for the remainder of 2023 and beyond.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Joey Politano on Fed Policy, Inflation, and the Current State of the US Economy
Despite a clear period of economic slowdown and ongoing inflationary pressures, the immediate threat of a recession in the US has slowly continued to wane.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Peter Conti-Brown on the Legal and Regulatory Issues Facing the Fed and Financial Markets
In order to maintain its legitimacy and independence as an institution, the Fed must remain detached from the partisanship of the political arena.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
David Wilcox on the Debt Ceiling Crisis and the Crippling Costs of Default
The short-term consequences of breaching the debt ceiling would not only be disastrous, but would also cause economic damage for years to come.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Julie Hill on the History and Recent Developments of Fed Master Accounts
From the Narrow Bank to Custodia, the use of Fed master accounts is quickly becoming an important hot topic in the realm of monetary and financial policy.

- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
The Neutral Level of NGDP and the NGDP Gap: Q4 2022
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Macro Lit Review 3: Highlights from Early 2023 with George Selgin
George Selgin rejoins David Beckworth to talk about a wide range of important macro developments.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Michael Strain on Averting the Looming Debt Ceiling Disaster
As the debt ceiling debacle continues to intensify, there are a couple of solutions that, if pursued, could help the US government avert a fiscal crisis.

- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
‘Team Permanent’ (Mostly) Won the Inflation Debate | National Review
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
John Roberts on Macroeconomic Modeling at the Fed, Makeup Policy, and the Future of FAIT
Taking a look back at a Fed career and the lessons learned for monetary policy.

- | Monetary Policy Monetary Policy
- | Research Papers Research Papers
Is the Quantity Theory Dead? Lessons from the Pandemic
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Paul Tucker on *Global Discord: Values and Power in a Fractured World Order*
As the threat of China continues to loom both economically and politically, the United States must opt for diplomatic strategies that continue to foster international cooperation and democratic values.

- | Monetary Policy Monetary Policy
- | Research Papers Research Papers
What Kind of Landing: Soft or Hard?
Latest Work in Monetary Policy
- | Monetary Policy Monetary Policy
- | TV Appearance TV Appearance
Today’s Fed Decision on Interest Rates | MSNBC's "Meet the Press Now"
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
The Fed Has Overseen a Remarkable Transfer of Wealth From Bondholders to Taxpayers | Barron's
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
It’s Time for the Fed to Take a Breath | National Review
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Steven Kelly on the Silicon Valley Bank Collapse and Its Implications for Financial Policy
As the Fed and regulators deal with the Signature and Silicon Valley Bank failures, the future of financial stability policy now hangs in the balance.

- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
The Role of Sound Monetary Policy in an Abundance Agenda | Discourse
- | Monetary Policy Monetary Policy
- | Podcast Appearance Podcast Appearance
Skyrocketing National Debt | American Radio Journal
- | Monetary Policy Monetary Policy
- | Podcast Appearance Podcast Appearance
The Failure of SVB | American Radio Journal
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Derek Tang on the Present and Future Landscape for Fed Policy and Politics
From personnel changes to the next framework review, the Fed has a lot on its plate for the remainder of 2023 and beyond.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Joey Politano on Fed Policy, Inflation, and the Current State of the US Economy
Despite a clear period of economic slowdown and ongoing inflationary pressures, the immediate threat of a recession in the US has slowly continued to wane.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Peter Conti-Brown on the Legal and Regulatory Issues Facing the Fed and Financial Markets
In order to maintain its legitimacy and independence as an institution, the Fed must remain detached from the partisanship of the political arena.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
David Wilcox on the Debt Ceiling Crisis and the Crippling Costs of Default
The short-term consequences of breaching the debt ceiling would not only be disastrous, but would also cause economic damage for years to come.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Julie Hill on the History and Recent Developments of Fed Master Accounts
From the Narrow Bank to Custodia, the use of Fed master accounts is quickly becoming an important hot topic in the realm of monetary and financial policy.

- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
The Neutral Level of NGDP and the NGDP Gap: Q4 2022
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Macro Lit Review 3: Highlights from Early 2023 with George Selgin
George Selgin rejoins David Beckworth to talk about a wide range of important macro developments.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Michael Strain on Averting the Looming Debt Ceiling Disaster
As the debt ceiling debacle continues to intensify, there are a couple of solutions that, if pursued, could help the US government avert a fiscal crisis.

- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
‘Team Permanent’ (Mostly) Won the Inflation Debate | National Review
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
John Roberts on Macroeconomic Modeling at the Fed, Makeup Policy, and the Future of FAIT
Taking a look back at a Fed career and the lessons learned for monetary policy.

- | Monetary Policy Monetary Policy
- | Research Papers Research Papers
Is the Quantity Theory Dead? Lessons from the Pandemic
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Paul Tucker on *Global Discord: Values and Power in a Fractured World Order*
As the threat of China continues to loom both economically and politically, the United States must opt for diplomatic strategies that continue to foster international cooperation and democratic values.

- | Monetary Policy Monetary Policy
- | Research Papers Research Papers
What Kind of Landing: Soft or Hard?
Latest Work in Monetary Policy
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
What Would Milton Friedman Say about the Recent Surge in Money Growth?
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What Would Milton Friedman Say about Business Cycles? The Plucking Model View
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What Would Milton Friedman Say about the Fed’s New Framework?
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What Would Milton Friedman Say about Financial Stability?
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What Would Milton Friedman Say about Market Monetarism?
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- | Policy Briefs Policy Briefs
What Would Milton Friedman Say about the Coordination of Monetary and Fiscal Policy?
- | Monetary Policy Monetary Policy
- | Research Papers Research Papers
Learning from the Pandemic Monetary Policy Experiment
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Mission Critical or Mission Creep? The Research Function of the Federal Reserve Banks
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Central Banks Are Inflation Creators, Not Inflation Fighters
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The Neutral Level of NGDP and the NGDP Gap: Q4 2021
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
How to Ensure That Inflation Will Remain at the Federal Reserve’s 2 Percent Target
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
The Neutral Level of NGDP and the NGDP Gap: Q3 2021
- | Monetary Policy Monetary Policy
- | Working Papers Working Papers
The Princeton School and the Zero Lower Bound
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- | Policy Briefs Policy Briefs
What Happens When Governments Pay for Spending with Money Creation? Lessons from the Early Riksbank
- | Monetary Policy Monetary Policy
- | Working Papers Working Papers
The Expectations Gap: An Alternative Measure of Economic Slack
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
The Neutral Level of NGDP and the NGDP Gap: Q2 2021
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
The Economic Situation, June 2021
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
The Neutral Level of NGDP and the NGDP Gap: Q1 2021
Latest Work in Monetary Policy
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Julie Hill on the History and Recent Developments of Fed Master Accounts
From the Narrow Bank to Custodia, the use of Fed master accounts is quickly becoming an important hot topic in the realm of monetary and financial policy.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Macro Lit Review 3: Highlights from Early 2023 with George Selgin
George Selgin rejoins David Beckworth to talk about a wide range of important macro developments.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Michael Strain on Averting the Looming Debt Ceiling Disaster
As the debt ceiling debacle continues to intensify, there are a couple of solutions that, if pursued, could help the US government avert a fiscal crisis.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
John Roberts on Macroeconomic Modeling at the Fed, Makeup Policy, and the Future of FAIT
Taking a look back at a Fed career and the lessons learned for monetary policy.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Paul Tucker on *Global Discord: Values and Power in a Fractured World Order*
As the threat of China continues to loom both economically and politically, the United States must opt for diplomatic strategies that continue to foster international cooperation and democratic values.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Victoria Guida on Developments at the Federal Reserve and in Financial Regulation
The Fed had its hands full with personnel changes, Master Account discourse, and other major FinReg issues in 2022, and the next year is poised to be full of even more challenges.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Martin Chorzempa on China’s Cashless Revolution and the Rise of Super Apps
The emergence of super apps in China is a marvel of technological convenience, but they remain a double-edged sword with potentially Orwellian consequences.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Heather Long, Ryan Avent, and Cardiff Garcia on Pandemic Reflections and Economic Predictions for the Future
Further development of AI, the ongoing geopolitical struggle with China, and continued labor supply challenges are just a few of the biggest economic issues facing the US over the next decade.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Tomas Hirst on the State of ECB Policy and the Eurozone Economy
As future inflationary trends remain uncertain across Europe, the ECB must walk a tightrope when considering further rate hikes.

- | Monetary Policy Monetary Policy
- | TV Appearance TV Appearance
After November CPI Report, Ex-Treasury Economist Warns of Major ‘Shock’ to US Economy | Fox Business
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- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Joe Gagnon on *25 Years of Excess Unemployment* and the Phillips Curve Debate
The past 25 years of unemployment and inflation data has demonstrated that it might be time to rethink how macroeconomics views the Phillips curve relationship.

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- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
BONUS: Noah Smith on the State of Macroeconomics
Establishing more credible and ubiquitous microfoundations is one important way to improve macroeconomic modeling in the present and future.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Noah Smith on the Future of the Chinese Economy and the Climate of Social Change in the US
As the economic, political, and social environment begins to collapse around Xi Jinping, China’s perceived hegemony is beginning to display serious cracks.

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- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Hugh Rockoff on Optimal Currency Areas, “Yellowbacks,” and Free Banking
How the Great Depression helped the U.S. develop into an optimal currency area.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Patrick Horan and David Beckworth on *The Fate of FAIT* and the Future of the Fed’s Monetary Framework
As inflation soars, the Fed’s new monetary regime has faced heavy criticism, but adding a nominal GDP targeting component may help salvage this recently adopted framework.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Ethan Ilzetzki on the International Implications of Fed Policy, Business Cycle Theory, and the UK Crisis
Although it’s easy to blame recent inflationary trends on the Fed’s actions, measuring the true effects of monetary policy is much more difficult macroeconomic exercise.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Megan Greene on the UK’s Recent Market Turmoil and What it Means for the Future of the Global Economy
After a perfect storm of factors recently plunged the UK in economic disarray, central banks across the globe should be taking notes on how to avoid a similar fate.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Yesha Yadav on Treasury Market Turmoil and Potential Solutions for Reform
Declining liquidity in the Treasury market poses a massive risk to the financial system, and urgent reform may be needed to avoid a looming crisis.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Peter Ganong on the Dynamism and Resiliency of the US Economy
By reducing housing costs and promoting smart welfare policy, the US can take concrete steps to bolster dynamism and resiliency within the macroeconomy.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Bill Nelson on How Bank Examiner Preferences are Obstructing Monetary Policy
By pushing heavily for reserve holdings over other liquid assets, bank examiners are creating unnecessary obstructions for monetary policy operations.

Latest Work in Monetary Policy
Latest Work in Monetary Policy
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Fed Keeps Rates Unchanged as Taper Talk Begins to Materialize
As the economic recovery continues to move at a steady pace, the FOMC gives its first indication of a shift in policy guidance.

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- | Expert Commentary Expert Commentary
Should the U.S. Return to the Gold Standard?
- | Monetary Policy Monetary Policy
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Should the U.S. Return to the Gold Standard?
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With Inflation on the Rise, Powell Sticks to His Guns
As prices climb and inflation forecasts continue to rise, Powell remains confident about the state of the economy as the recovery ramps up.

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The Fed Often Gets Monetary Policy Right
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Fed: Inflation Marches, but Don’t Tighten — Yet
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Should Central Banks Offer the Public Token-Based Digital Currencies?
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Inside the Fed’s Playbook for a Dollar Default
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Money and the Rule of Law
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Saving, Investment, and Secular Stagnation
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The Fed’s Message Remains Clear: Inflation Fears Are Vastly Overblown
As the economic recovery from the COVID pandemic continues, Powell holds fast on the Federal Reserve’s policy commitments while assuaging continued concerns surrounding inflation.

- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Should We Worry About Inflation? Not Yet
- | Financial Markets Financial Markets
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A Challenge for the Fed: Some Overnight Rates Are Falling Below Zero
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Inflation Is Uncontainable but Not Inevitable
Even if there are price increases, they’re unlikely to be steep.
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There's Debate Over Stimulus Driving Inflation, but What Are the Facts?
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Stop Worrying About Inflation
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Is the Federal Reserve Taking Too Much Risk?
The central bank's failure to respond to a FOIA request raises questions about its risk management.
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Powell Reiterates Commitment to Accommodative Policy As Vaccinations Remain the Key to Recovery
Although continued fiscal and monetary action is needed to stabilize the economy, mass vaccination is crucial for broad recovery

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- | Expert Commentary Expert Commentary
Despite Persistent Concerns over Lackluster Inflation, Powell Urges Fiscal Action
While disinflationary forces still cast doubt on the Fed’s new monetary regime, the chairman pushes for more fiscal relief in the wake of the coronavirus

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- | Expert Commentary Expert Commentary