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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Tara Sinclair on Real-time Economic Analysis and the Fed’s Upcoming Framework Review
As real-time economic analysis becomes an increasingly important part of the policymaking process, it’s more important than ever to ensure that statistical agencies receive the funding they need.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Joseph Gagnon on the Trinity of COVID-Era Inflation and the Upcoming Fed Framework Review
Understanding the trinity of forces that drove the inflation surge during the pandemic period may provide valuable insights on how to prevent a similar episode in the future.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Emilio Ocampo on Dollarization and the State of the Argentine Economy
As Argentina’s economy continues to recover and rebound, transitioning to a dollarization policy may be the next step toward achieving economic revival.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Jonathon Hazell on the Costs and Causes of Inflation and the Phillips Curve Debate
When measuring the impacts of rising inflation on workers, it’s important to factor in the conflict costs associated with negotiating higher wages.

- | Monetary Policy Monetary Policy
- | Podcast Appearance Podcast Appearance
The Performance of the Fed During the Recent Inflationary Cycle | The Society of Professional Economists’ “Econ Thoughts” (podcast)
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Thomas Drechsel on the Effects of Political Pressure and Identifying Monetary Policy Shocks
Recent data reveals that when U.S. presidents exert political pressure on the Federal Reserve, significant swings in inflation often follow.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Matthew Pines on the Geopolitical and National Security Implications of Cryptocurrency Adoption
Expanding institutional cryptocurrency adoption could be a crucial strategy for helping curb the expansion of China’s growing digital authoritarianism across the globe.

- | 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
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Travis Hill on the Discount Window, Receivership Funding, and Financial Tokenization
Establishing a new pre-positioning rule could be a novel solution that would help normalize and destigmatize the use of the discount window moving forward.

- | Monetary Policy Monetary Policy
- | Radio Appearance Radio Appearance
Should The Fed Cut Rates? | WTAN Radio
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Catherine Pakaluk on *Hannah’s Children: The Women Quietly Defying the Birth Dearth*
As birth rates continue to decline around the globe, it’s important to recognize the wide range of benefits that come with having more children and larger families.

- | 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
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Stephen Miran on Activist Treasury Issuance and the Monetary Policy Implications of a Second Trump Term
While the actions of the Treasury have helped facilitate the Fed’s recent goals of achieving a soft landing, its potential political motivations in doing so should not be ignored.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Carola Binder on the History of Inflation, the Fed Framework Review, and the Promise of Nominal GDP Targeting
The history of inflation in the US provides the Fed and other policymakers plenty of lessons for how to more effectively stabilize prices as the economy continues to evolve.

- | Monetary Policy Monetary Policy
- | TV Appearance TV Appearance
Stocks Rise as Federal Reserve Rates Expected To Be Cut | Global Catholic Television Network
- | Monetary Policy Monetary Policy
- | Radio Appearance Radio Appearance
When Interest Rate Cuts Come, Where Will You Feel Them First? | Marketplace Radio
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
A Dangerous Gambit | City Journal
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Samim Ghamami on How to Reform the Treasury Market
Broadening access to the standing repo facility may be the most effective first step towards reforming the Treasury market.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Kyla Scanlon on the “Vibecession”, the Vibe Economy, and the Path to Growing American Wealth
As the US continues to navigate through the post-pandemic Vibecession landscape, it’s more important than ever to bridge the disconnect between the American people and their perception of the economy.

Latest work in Monetary Policy
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Tara Sinclair on Real-time Economic Analysis and the Fed’s Upcoming Framework Review
As real-time economic analysis becomes an increasingly important part of the policymaking process, it’s more important than ever to ensure that statistical agencies receive the funding they need.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Joseph Gagnon on the Trinity of COVID-Era Inflation and the Upcoming Fed Framework Review
Understanding the trinity of forces that drove the inflation surge during the pandemic period may provide valuable insights on how to prevent a similar episode in the future.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Emilio Ocampo on Dollarization and the State of the Argentine Economy
As Argentina’s economy continues to recover and rebound, transitioning to a dollarization policy may be the next step toward achieving economic revival.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Jonathon Hazell on the Costs and Causes of Inflation and the Phillips Curve Debate
When measuring the impacts of rising inflation on workers, it’s important to factor in the conflict costs associated with negotiating higher wages.

- | Monetary Policy Monetary Policy
- | Podcast Appearance Podcast Appearance
The Performance of the Fed During the Recent Inflationary Cycle | The Society of Professional Economists’ “Econ Thoughts” (podcast)
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Thomas Drechsel on the Effects of Political Pressure and Identifying Monetary Policy Shocks
Recent data reveals that when U.S. presidents exert political pressure on the Federal Reserve, significant swings in inflation often follow.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Matthew Pines on the Geopolitical and National Security Implications of Cryptocurrency Adoption
Expanding institutional cryptocurrency adoption could be a crucial strategy for helping curb the expansion of China’s growing digital authoritarianism across the globe.

- | 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
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Travis Hill on the Discount Window, Receivership Funding, and Financial Tokenization
Establishing a new pre-positioning rule could be a novel solution that would help normalize and destigmatize the use of the discount window moving forward.

- | Monetary Policy Monetary Policy
- | Radio Appearance Radio Appearance
Should The Fed Cut Rates? | WTAN Radio
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Catherine Pakaluk on *Hannah’s Children: The Women Quietly Defying the Birth Dearth*
As birth rates continue to decline around the globe, it’s important to recognize the wide range of benefits that come with having more children and larger families.

- | 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
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Stephen Miran on Activist Treasury Issuance and the Monetary Policy Implications of a Second Trump Term
While the actions of the Treasury have helped facilitate the Fed’s recent goals of achieving a soft landing, its potential political motivations in doing so should not be ignored.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Carola Binder on the History of Inflation, the Fed Framework Review, and the Promise of Nominal GDP Targeting
The history of inflation in the US provides the Fed and other policymakers plenty of lessons for how to more effectively stabilize prices as the economy continues to evolve.

- | Monetary Policy Monetary Policy
- | TV Appearance TV Appearance
Stocks Rise as Federal Reserve Rates Expected To Be Cut | Global Catholic Television Network
- | Monetary Policy Monetary Policy
- | Radio Appearance Radio Appearance
When Interest Rate Cuts Come, Where Will You Feel Them First? | Marketplace Radio
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
A Dangerous Gambit | City Journal
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Samim Ghamami on How to Reform the Treasury Market
Broadening access to the standing repo facility may be the most effective first step towards reforming the Treasury market.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Kyla Scanlon on the “Vibecession”, the Vibe Economy, and the Path to Growing American Wealth
As the US continues to navigate through the post-pandemic Vibecession landscape, it’s more important than ever to bridge the disconnect between the American people and their perception of the economy.

Latest work in Monetary Policy
- | Monetary Policy Monetary Policy
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Gas Prices, Inflation Expectations, and Consumer Sentiment
- | Monetary Policy Monetary Policy
- | Research Papers Research Papers
How the Federal Open Market Committee Can Start Learning from Experience
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
An Inflation Primer
- | Monetary Policy Monetary Policy
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The Neutral Level of NGDP and the NGDP Gap: Q1 2022
- | Monetary Policy Monetary Policy
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What Would Milton Friedman Say about the Recent Surge in Money Growth?
- | Monetary Policy Monetary Policy
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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?
- | Monetary Policy Monetary Policy
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What Would Milton Friedman Say about Market Monetarism?
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
What Would Milton Friedman Say about the Coordination of Monetary and Fiscal Policy?
- | Monetary Policy Monetary Policy
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Learning from the Pandemic Monetary Policy Experiment
- | Monetary Policy Monetary Policy
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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
- | Monetary Policy Monetary Policy
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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
POLICY SPOTLIGHT: Average Inflation Targeting and the Benefits of Offsetting Periods of High or Low Inflation
- | Monetary Policy Monetary Policy
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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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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
Latest work in Monetary Policy
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Sam Schulhofer-Wohl on How to Improve Treasury Market Resiliency
Implementing reliable central clearing or all-to-all trading are just a few potential options to consider for reforming the Treasury market.

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- | TV Appearance TV Appearance
Wall Street Slumps and Worrying Signs | News Nightly
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Nicholas Anthony on *Digital Currency or Digital Control: Decoding CBDC and the Future of Money*
As an increasing number of central banks contemplate the implementation of CBDCs, it is crucial to balance the benefits they offer against the risks to financial privacy, cybersecurity, and overall economic freedom.

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- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
James Bullard on FAIT, Nominal GDP Targeting, and the Fed’s Upcoming Framework Review
As the Fed approaches its next framework review, there are numerous modifications the central bank could consider to further enhance its current monetary policy framework.

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- | Mercatus Original Podcasts Mercatus Original Podcasts
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Josh Lipsky on Financial Statecraft, Cross-border Payments, and the Global Status of the Dollar
Financial statecraft has been a crucial economic and geopolitical instrument in U.S. foreign policy and will continue to serve as an essential tool in the new era of digital currencies.

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- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Steven Kelly on the Financial Stability Implications of the Discount Window
In order to prevent future financial instability, the Fed should consider further action in addressing the elephant in the room that is the discount window.

- | Monetary Policy Monetary Policy
- | Podcast Appearance Podcast Appearance
Money Supply and Inflation: How They Relate | AIER’s “Econception”
- | Monetary Policy Monetary Policy
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Ernie Tedeschi on Full Employment, the US Safe Harbor Premium, and the Current Path of R-Star
Although the US currently enjoys the benefits of a safe harbor investment premium, there are numerous potential risks that could arise that would greatly threaten the future health of the US economy.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Jeffrey Lacker on Fed Governance and Learning from the Recent Inflation Surge
To prevent future policy errors, the Fed should aim to be more transparent about reviewing and acknowledging past mistakes.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Mickey Levy on How to Reboot Fed Policy Ahead of its Upcoming Framework Review
As the Fed approaches its next framework review period, there are a number of changes that the central bank can make to improve how it evaluates and executes monetary policy.

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CPI and Fed Policy Meeting In Focus | CNBC
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I’m Not Expecting Any Rate Cuts This Year | BNN Bloomberg
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Lars Christensen on AI and its Impact on Monetary Policy and the Broader Field of Economics
As AI technology continues to progress, its effects may forever change the world of economics and economic policymaking.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Ryan Bourne on *The War on Prices: How Popular Misconceptions about Inflation, Prices, and Value Create Bad Policy*
In an era plagued by high inflation and its pernicious economic effects, it’s more important than ever to dispel the many false notions surrounding prices and the crucial role they play in the broader economy.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
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George Selgin on Fed Master Accounts, Central Bank Independence, and the Fed’s Balance Sheet
George Selgin rejoins David Beckworth to discuss a variety of important developments in the monetary and fiscal policy space.

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- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Roberto Perli on the Past, Present, and Future of the Fed’s Balance Sheet
Slowing the pace of its balance sheet runoff is an important step the Fed can take to more effectively manage risks while allowing the banking system to adapt to lower levels of reserves.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Mary Daly on Fed Policy, the Economic Impacts of AI, and the Future of the Fed’s Framework
As the Fed closes in on its next framework review period, properly balancing inflation risks with labor market stability remains the core mission of the central bank moving forward.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Dan Katz and Stephen Miran on Reforming the Federal Reserve’s Governance
Restructuring the terms of Fed board members and bolstering the relative power of reserves banks are just a few ways to improve the accountability and legitimacy of Fed governance.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Richard Clarida on FAIT, R-Star, and the Future of the Fed’s Framework
The Fed should consider improving its strategic communication while more effectively anchoring future inflation expectations as it closes in on its next framework review period.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Saleha Mohsin on *Paper Soldiers: How the Weaponization of the Dollar Changed the World Order*
The global strength of the dollar has provided many economic and geopolitical benefits for the US, but it has also come with numerous costs, both domestically and internationally.

Latest work in Monetary Policy
Latest work in Monetary Policy
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Monetary Conflation | EconLib
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What is a Low Interest Rate Policy? | The Money Illusion
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What is Monetary Policy? | EconLib
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Monetary Policy isn’t What you Think it is | The Money Illusion
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How Much Nominal Overheating? | Seeking Alpha
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Mercatus Center Friedman Symposium | EconLib
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- | Feature Feature
Mercatus Symposium | What Would Milton Friedman Say?
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Removing Ego From Monetary Policy | EconLib
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Confusion About “Overheating” | EconLib
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Is Money (Nominally) Neutral? | EconLib
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NGDP Targeting and Libertarianism | EconLib
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A Better Way to Gauge Economic Performance
New research on NGDP Gap measurement can inform better macroeconomic 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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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?
- | Monetary Policy Monetary Policy
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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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