Kevin Warsh · Federal Reserve (FED) · Jerome Powell · Democrats · Fortune Technology
Kevin Warsh just shipped a major change for the Fed
Compiled by KHAO Editorial — aggregated from 1 source. See llms.txt for citation guidance.
◌ Single Source
Federal Reserve Chair Kevin Warsh has revealed himself.
Key facts
- On September 16, during his post-Federal Open Market Committee (FOMC) press conference, Warsh further elaborated
- Monetarist analysis can provide a range or channel for price levels (or inflation) over a 1- to 3-year horizon, but not a month-to-month forecast
- To hit the Fed’s target rate of inflation of 2% the rate of growth in the money supply needs to be reduced to around 6%
- Well, it turns out that a tiny band of monetarists, including ourselves and Tim Congdon, did notice the Great Financial Crisis
Summary
This is a welcomed earthquake. After all, there are almost no monetarists left in the world (except for them, and they've been fighting a lonely rearguard action for over 40 years). It’s a doctrine which holds that money has a major influence on both the level of asset prices, economic activity, and the price level. Today, most economists pooh-pooh monetarism. If that’s not enough, they think that the Fed’s backroom staff, mostly Keynesian-leaning Democrats, don’t want alignment with a philosophy usually affiliated with Milton Friedman, but that’s another story.