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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Kathryn Judge on the Importance of Emergency Lending Facilities at the Federal Reserve
How best can we safeguard the Fed’s Independence?

- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Breaking up Is Hard To Do | Macroeconomic Policy Nexus
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Paul Blustein on the Rise, Dominance, and Current Challenges to King Dollar
What is the secret sauce to making the dollar so dominant?

- | Monetary Policy Monetary Policy
- | TV Appearance TV Appearance
Fed Will Be ‘Very Hesitant’ To Cut Rates Into Inflationary Environment | CNBC’s Closing Bell: Overtime
- | Monetary Policy Monetary Policy
- | Podcast Appearance Podcast Appearance
Trump’s Tariffs | Newt’s World
- | Monetary Policy Monetary Policy
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Former Fed President: How Will Fed Prevent 'Economic Fallout'? | The David Lin Report
- | Monetary Policy Monetary Policy
- | TV Appearance TV Appearance
Today’s CPI Report | Fox 5 News with Jim Lokay (DC)
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
How the Fed Should Deal With Tariffs | City Journal
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
A New Plumbing System for Central Banks? | Macroeconomic Policy Nexus
- | Monetary Policy Monetary Policy
- | Working Papers Working Papers
Survey Measures of the Natural Rate of Interest
Offering policymakers new tools to determine the current stance of monetary policy
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Bill Nelson on the Future of Central Bank Operating Systems
Ready or Not, Here Comes Demand-Driven Ceiling Systems

- | Monetary Policy Monetary Policy
- | Radio Appearance Radio Appearance
If Tariffs Aren’t the Solution for America’s Economy, What Is? | Lars Larson Show
- | Monetary Policy Monetary Policy
- | TV Appearance TV Appearance
Breaking Down the March Jobs Report | New York Stock Exchange TV
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
From 'Liberation Day' to Stagflation's Return? | Macroeconomic Policy Nexus
- | Monetary Policy Monetary Policy
- | TV Appearance TV Appearance
February PCE Data: The Fed Is in a Vulnerable Spot | CNBC’s “Squawk Box”
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Once Bitten, Twice Shy | Macroeconomic Policy Nexus (Substack)
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Lyman Stone on Demographic and Marriage Decline
Do you view people as stomachs or brains?

- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Pronatalism as Macroeconomic Policy | Macroeconomic Policy Nexus (Substack)
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Don’t Throw Out the Makeup Policy Baby With the Fait Bathwater | Macroeconomic Policy Nexus (Substack)
- | Monetary Policy Monetary Policy
- | Research Papers Research Papers
Making Milton Friedman’s Monetarism Relevant Again
How the Fed’s shift to monetarism proved inflation is a monetary phenomenon—and why Friedman’s insights still matter for policy today
Latest work in Monetary Policy
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Kathryn Judge on the Importance of Emergency Lending Facilities at the Federal Reserve
How best can we safeguard the Fed’s Independence?

- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Breaking up Is Hard To Do | Macroeconomic Policy Nexus
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Paul Blustein on the Rise, Dominance, and Current Challenges to King Dollar
What is the secret sauce to making the dollar so dominant?

- | Monetary Policy Monetary Policy
- | TV Appearance TV Appearance
Fed Will Be ‘Very Hesitant’ To Cut Rates Into Inflationary Environment | CNBC’s Closing Bell: Overtime
- | Monetary Policy Monetary Policy
- | Podcast Appearance Podcast Appearance
Trump’s Tariffs | Newt’s World
- | Monetary Policy Monetary Policy
- | Podcast Appearance Podcast Appearance
Former Fed President: How Will Fed Prevent 'Economic Fallout'? | The David Lin Report
- | Monetary Policy Monetary Policy
- | TV Appearance TV Appearance
Today’s CPI Report | Fox 5 News with Jim Lokay (DC)
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
How the Fed Should Deal With Tariffs | City Journal
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
A New Plumbing System for Central Banks? | Macroeconomic Policy Nexus
- | Monetary Policy Monetary Policy
- | Working Papers Working Papers
Survey Measures of the Natural Rate of Interest
Offering policymakers new tools to determine the current stance of monetary policy
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Bill Nelson on the Future of Central Bank Operating Systems
Ready or Not, Here Comes Demand-Driven Ceiling Systems

- | Monetary Policy Monetary Policy
- | Radio Appearance Radio Appearance
If Tariffs Aren’t the Solution for America’s Economy, What Is? | Lars Larson Show
- | Monetary Policy Monetary Policy
- | TV Appearance TV Appearance
Breaking Down the March Jobs Report | New York Stock Exchange TV
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
From 'Liberation Day' to Stagflation's Return? | Macroeconomic Policy Nexus
- | Monetary Policy Monetary Policy
- | TV Appearance TV Appearance
February PCE Data: The Fed Is in a Vulnerable Spot | CNBC’s “Squawk Box”
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Once Bitten, Twice Shy | Macroeconomic Policy Nexus (Substack)
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Lyman Stone on Demographic and Marriage Decline
Do you view people as stomachs or brains?

- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Pronatalism as Macroeconomic Policy | Macroeconomic Policy Nexus (Substack)
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Don’t Throw Out the Makeup Policy Baby With the Fait Bathwater | Macroeconomic Policy Nexus (Substack)
- | Monetary Policy Monetary Policy
- | Research Papers Research Papers
Making Milton Friedman’s Monetarism Relevant Again
How the Fed’s shift to monetarism proved inflation is a monetary phenomenon—and why Friedman’s insights still matter for policy today
Latest work in Monetary Policy
- | Monetary Policy Monetary Policy
- | Working Papers Working Papers
Survey Measures of the Natural Rate of Interest
Offering policymakers new tools to determine the current stance of monetary policy
- | Monetary Policy Monetary Policy
- | Research Papers Research Papers
Making Milton Friedman’s Monetarism Relevant Again
How the Fed’s shift to monetarism proved inflation is a monetary phenomenon—and why Friedman’s insights still matter for policy today
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
Measuring Macroeconomic Policy: the NGDP Gap
- | Federal Reserve Framework Review Federal Reserve Framework Review
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
Post-pandemic Inflation and Improving FAIT with Nominal GDP Level Targeting
Flexible average inflation targeting can be improved by dropping its asymmetry so that it is implemented as a form of nominal GDP level targeting
- | Federal Reserve Framework Review Federal Reserve Framework Review
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
Financial Stability and Nominal GDP Targeting
NGDP targeting is simpler, more intuitive, and more robust than the current monetary policy strategy
- | Federal Reserve Framework Review Federal Reserve Framework Review
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
Targeting Nominal GDP Through Monetary Control
Instead of using flexible average inflation targeting (FAIT) to control inflation, the Federal Reserve should shift its strategy to target the nation’s economic growth rate, measured as nominal (not adjusted for inflation) GDP
- | Federal Reserve Framework Review Federal Reserve Framework Review
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
A Critique of Lars Svensson’s Arguments Against NGDP Targeting
Lars Svensson’s conclusion that nominal GDP targeting (NGDPT) is inferior to average inflation targeting rested upon several subtle fallacies, so the Fed should use its current framework review to reconsider NGDPT
- | Federal Reserve Framework Review Federal Reserve Framework Review
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
A Rule-Based Monetary Policy
Monetary policy remains a contentious topic, but historical evidence, particularly from the Volcker–Greenspan era, suggests that the rule-based approach would offer greater predictability, stability, transparency, and consistency in Fed policy
- | Federal Reserve Framework Review Federal Reserve Framework Review
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
An Effective Monetary Policy with Nominal GDP Level Targeting
The Federal Reserve should consider adopting a policy of nominal GDP level targeting, which is the best way to stabilize the labor market and the financial system while maintaining an average inflation rate of close to 2 percent
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
The Fed’s 2024–25 Framework Review: Optimizing the Dual Mandate Through Nominal GDP Level Targeting
As the Federal Reserve considers how to implement its dual mandate of price stability and maximum employment, it should adopt—or approach—nominal GDP level targeting as a benchmark framework.
- | Monetary Policy Monetary Policy
- | Working Papers Working Papers
A New Measure of the Stance of Eurozone Monetary Policy
The NGDP gap can help policymakers assess whether current policy is on track
- | Monetary Policy Monetary Policy
- | Research Papers Research Papers
Last Resort Lending: Classical Thought vs. Modern Federal Reserve Practice
Central banks used to play a far smaller role in credit markets than the Federal Reserve does today.
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
Strengthening the Federal Reserve’s Accountability to the US Congress
Congress has a constitutional duty to oversee the Federal Reserve, but the complexity of its monetary policy has outpaced existing oversight tools. This brief looks at approaches for restoring the balance between the Fed’s independence and accountability.
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
POLICY SPOTLIGHT | A Rule-Based Monetary Policy
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
The Economic Situation, September 2024
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
Enhancing FOMC Transparency: Making Implicit Monetary Policy Rules Explicit
The FOMC communicates the consistency in its monetary policy to markets but not the public. In order to be more accountable and transparent, the FOMC should communicate that consistency to the public and Congress as well.
- | Monetary Policy Monetary Policy
- | Research Papers Research Papers
What the Fed Needs to Do to Control Inflation and Stabilize the Economy
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
The Neutral Level of NGDP and the NGDP Gap: Q1 2024
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
The Neutral Level of NGDP and the NGDP Gap: Q4 2023
- | Monetary Policy Monetary Policy
- | Research Papers Research Papers
Getting Monetary Policy Right: What Should the Federal Reserve Have Learned from Its Pandemic Response?
Latest work in Monetary Policy
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Kathryn Judge on the Importance of Emergency Lending Facilities at the Federal Reserve
How best can we safeguard the Fed’s Independence?

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Paul Blustein on the Rise, Dominance, and Current Challenges to King Dollar
What is the secret sauce to making the dollar so dominant?

- | Monetary Policy Monetary Policy
- | TV Appearance TV Appearance
Fed Will Be ‘Very Hesitant’ To Cut Rates Into Inflationary Environment | CNBC’s Closing Bell: Overtime
- | Monetary Policy Monetary Policy
- | Podcast Appearance Podcast Appearance
Trump’s Tariffs | Newt’s World
- | Monetary Policy Monetary Policy
- | Podcast Appearance Podcast Appearance
Former Fed President: How Will Fed Prevent 'Economic Fallout'? | The David Lin Report
- | Monetary Policy Monetary Policy
- | TV Appearance TV Appearance
Today’s CPI Report | Fox 5 News with Jim Lokay (DC)
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Bill Nelson on the Future of Central Bank Operating Systems
Ready or Not, Here Comes Demand-Driven Ceiling Systems

- | Monetary Policy Monetary Policy
- | Radio Appearance Radio Appearance
If Tariffs Aren’t the Solution for America’s Economy, What Is? | Lars Larson Show
- | Monetary Policy Monetary Policy
- | TV Appearance TV Appearance
Breaking Down the March Jobs Report | New York Stock Exchange TV
- | Monetary Policy Monetary Policy
- | TV Appearance TV Appearance
February PCE Data: The Fed Is in a Vulnerable Spot | CNBC’s “Squawk Box”
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Lyman Stone on Demographic and Marriage Decline
Do you view people as stomachs or brains?

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Athanasios Orphanides on Real-Time Monetary Rules and their Impact on the Fed’s Framework Review
Natural Growth Targeting and the Future of Monetary Policy

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Dean Ball on the Past, Present, and Future of AI
Does the future belong to the curious?

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Liya Palagashvili on the Gig Economy, Portable Benefits, and Changing Labor Regulations
Who actually makes up the gig economy?

- | Monetary Policy Monetary Policy
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- | Macro Musings Macro Musings
Evan Koenig on the Case for Nominal GDP Targeting
A former Fed insider explains his ideal framework

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- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Steven Kelly on the Challenges of Treasury Equity Funding for 13(3) Facilities
Is there a better way to do emergency Fed lending?

- | Monetary Policy Monetary Policy
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- | Macro Musings Macro Musings
Senator Pat Toomey on Fed Governance, Monetary Policy, and the future of Digital Assets
Can our debt problem be solved?

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Brian Albrecht on Business Dynamism, Greedflation, and Antitrust
Do we need to rethink what we know about Econ 101, again?

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Javier Milei’s Approach to Politics Has Been Working ‘Very Well’ | Sky News
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The Fed Framework Review: Macro Musings’ Greatest NGDP Targeting Hits
Are you glutton for Macro Musings punishment?

Latest work in Monetary Policy
- | Monetary Policy Monetary Policy
- | State Testimonies State Testimonies
The Evolution of the Role of the Federal Reserve
Pennsylvania House Majority Policy Committee
- | Monetary Policy Monetary Policy
- | Federal Testimonies Federal Testimonies
Safeguarding the Federal Reserve's Independence
Testimony before the Subcommittee on National Security, International Development, and Monetary Policy of the House Committee on Financial Services
- | Monetary Policy Monetary Policy
- | Public Interest Comments Public Interest Comments
FedNow Portends a More Competitive and Resilient Payments System
- | Monetary Policy Monetary Policy
- | Public Interest Comments Public Interest Comments
Response to the Federal Housing Finance Agency Request for Comment on How Its Regulations May Be Made More Effective and Less Burdensome
- | Technology and Innovation Technology and Innovation
- | Public Interest Comments Public Interest Comments
Comments to the New York Department of Financial Services on the Proposed Virtual Currency Regulatory Framework
- | Financial Markets Financial Markets
- | Federal Testimonies Federal Testimonies
Legislation to Reform the Federal Reserve on Its 100-year Anniversary
Testimony Before the House Committee on Financial Services Committee
- | Financial Markets Financial Markets
- | Federal Testimonies Federal Testimonies
Ending the Federal Reserve System’s Overreach into Credit Allocation
Testimony Before the Subcommittee on Monetary Policy and Trade House Committee on Financial Services
- | Technology and Innovation Technology and Innovation
- | Federal Testimonies Federal Testimonies
Beyond Silk Road: Potential Risks, Threats, and Promises of Virtual Currencies
Testimony Before the Senate Committee on Homeland Security and Governmental Affairs
- | Monetary Policy Monetary Policy
- | Federal Testimonies Federal Testimonies
The Federal Reserve and the Rule of Law
Testimony Before the House Committee on Financial Services
- | Monetary Policy Monetary Policy
- | Federal Testimonies Federal Testimonies
Fractional Reserve Banking
Testimony Before the House Subcommittee on Domestic Monetary Policy and Technology
- | Monetary Policy Monetary Policy
- | Public Interest Comments Public Interest Comments
Mutual Fund After-Tax Returns
- | Monetary Policy Monetary Policy
- | Public Interest Comments Public Interest Comments
Minimum Security Devices and Procedures and Bank Secrecy Act
Latest work in Monetary Policy
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Breaking up Is Hard To Do | Macroeconomic Policy Nexus
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
How the Fed Should Deal With Tariffs | City Journal
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
A New Plumbing System for Central Banks? | Macroeconomic Policy Nexus
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
From 'Liberation Day' to Stagflation's Return? | Macroeconomic Policy Nexus
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Once Bitten, Twice Shy | Macroeconomic Policy Nexus (Substack)
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Pronatalism as Macroeconomic Policy | Macroeconomic Policy Nexus (Substack)
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Don’t Throw Out the Makeup Policy Baby With the Fait Bathwater | Macroeconomic Policy Nexus (Substack)
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Welcome to Macroeconomic Policy Nexus! | Macroeconomic Policy Nexus (Substack)
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Things Are Looking Up for Argentina | City Journal
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
The Fed Needs To Learn from Its Inflation Mistakes – The Biggest Lesson | Barron’s
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
A Dangerous Gambit | City Journal
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
A Plan for Election-year Rate Cuts Without the Political Chaos | The Hill
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Will High Interest Rates and a Weakening Economy Deliver a Recession? | Washington Examiner
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
The Federal Reserve Should Let Exchange Rates Float | Discourse
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Dollarization or Not, Argentina’s Future Will Be Expensive | Bloomberg Opinion
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
How To Stop Mission Creep at the Federal Reserve | Discourse
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Part 4: Reasons a Court Should Find That the SEC Lacked Legal Authority for the Climate-Change Disclosure Rules | FinRegRag
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Instead of More Political Control, the Fed Needs More Rules and Transparency | Discourse
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Part 2: Reasons a Court Should Find That the SEC Lacked Legal Authority for the Climate-change Disclosure Rules | FinRegRag
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary