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The Fed’s Inflation Fixation »

The Federal Reserve has an inflation target of 2% per year. That target appears to be a minimum: They are concerned when inflation falls below their target but appear to be content with inflation above 2%. The current inflation rate from March 2016 to March 2017, measured by the Consumer Price Index, is 2.4%....
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Filling the Federal Reserve Board Vacancies? »

(See updates below, 2/13, 2/24, 6/12, 6/15, 7/27, 8/12.) Five of the most important appointments Donald Trump will make during his first year in office will be to fill three vacancies on the Federal Reserve Board, to reappoint or replace Janet Yellen as Federal Reserve Board Chair, and to designate one of the Board...
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9/11’s Legacies: Fewer Civil Liberties and Bigger Banks »

September 11, 2016, marks the fifteenth anniversary of a calamity that shook America to its core. I remember vividly to this day being riveted by the constant video replays of the two Boeing 767s plowing into the World Trade Center, people leaping from office windows to their deaths, the collapses of the twin towers,...
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The Stock Market Reacts to the Fed’s Interest Rate Hike »

After the Fed’s November meeting, when the Fed decided not to hike interest rates, the stock market fell, indicating the disappointment of market participants. As I noted at the time, because lower interest rates tend to raise asset prices, the market decline was an indication of disapproval from market participants. At the Fed’s December...
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Is an Interest Rate Hike Overdue? »

While I’m reluctant to attribute movements in stock prices to specific events, this article says that the big run-up in stock prices (around 1.5%) today was due to the release of the Federal Reserve’s minutes of their last meeting indicating that “a core of officials backed a possible rate hike in December.” The conventional...
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The Fed’s Interest Rate Hike Is Overdue »

I am not the only one who thinks the Federal Reserve should have raised its target federal funds rate at its September 17 meeting, as they suggested they would do months ago, although opinion was mixed on whether the Fed would raise the rate, and whether it should. The Fed is holding the federal...
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Donald Boudreaux’s The Essential Hayek »

Readers who want to get a flavor for the ideas of Friedrich Hayek will find an excellent introduction in Donald Boudreaux’s The Essential Hayek. The book can be downloaded free by clicking here. Each chapter begins with a quotation from Hayek, but the book’s chapters explain Hayek’s ideas in Boudreaux’s words. Those ideas come...
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Why Americans Should Celebrate President John Tyler »

[The following is from “Freedom’s Presidents,” a symposium for Presidents’ Day 2015, published by The Freeman. Reprinted with permission.] John Tyler was generally in favor of limiting government—both domestically and internationally—much to the chagrin of his own Whig Party. It advocated a revival of the national bank and high tariffs, both of which would...
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Are Falling Prices a Bad Thing? »

Popular opinion seems to be that falling prices—or even stable prices—are bad for the economy, but I’ve never seen any good arguments about why. I’ve just read another article about this, that gives six clearly numbered reasons, so let’s look at what the article says to see if they hold up.

Reining in the Fed »

The House of Representatives is currently considering a variety of bills intended to reduce the power of the Federal Reserve System. (“House Republicans Resume Efforts to Reduce Fed’s Power,” New York Times, July 11, Business Section.) Under the pretext of fighting high unemployment, the Fed has more than quadrupled its balance sheet since summer...
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