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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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.

- | 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
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
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.

- | Monetary Policy Monetary Policy
- | TV Appearance TV Appearance
Wall Street Slumps and Worrying Signs | News Nightly
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
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.

- | 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
- | 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.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
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.

- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
The Federal Reserve Should Let Exchange Rates Float | Discourse
- | Monetary Policy Monetary Policy
- | 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
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
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.

- | Monetary Policy Monetary Policy
- | TV Appearance TV Appearance
CPI and Fed Policy Meeting In Focus | CNBC
- | Monetary Policy Monetary Policy
- | TV Appearance TV Appearance
I’m Not Expecting Any Rate Cuts This Year | BNN Bloomberg
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
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
- | Research Papers Research Papers
What the Fed Needs to Do to Control Inflation and Stabilize the Economy
Latest work in Monetary Policy
- | 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.

- | 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
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
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.

- | Monetary Policy Monetary Policy
- | TV Appearance TV Appearance
Wall Street Slumps and Worrying Signs | News Nightly
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
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.

- | 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
- | 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.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
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.

- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
The Federal Reserve Should Let Exchange Rates Float | Discourse
- | Monetary Policy Monetary Policy
- | 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
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
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.

- | Monetary Policy Monetary Policy
- | TV Appearance TV Appearance
CPI and Fed Policy Meeting In Focus | CNBC
- | Monetary Policy Monetary Policy
- | TV Appearance TV Appearance
I’m Not Expecting Any Rate Cuts This Year | BNN Bloomberg
- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
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
- | Research Papers Research Papers
What the Fed Needs to Do to Control Inflation and Stabilize the Economy
Latest work in Monetary Policy
- | Monetary Policy Monetary Policy
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The Neutral Level of NGDP and the NGDP Gap: Q2 2021
- | Monetary Policy Monetary Policy
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The Economic Situation, June 2021
- | Monetary Policy Monetary Policy
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The Neutral Level of NGDP and the NGDP Gap: Q1 2021
- | Monetary Policy Monetary Policy
- | Working Papers Working Papers
The Recovery from the Great Recession: Did the FOMC Learn the Right Lessons?
- | Monetary Policy Monetary Policy
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The Neutral Level of NGDP and the NGDP Gap: Q4 2020
- | Monetary Policy Monetary Policy
- | Working Papers Working Papers
Reforming Australian Monetary Policy: How Nominal Income Targeting Can Help Get the Reserve Bank Back on Track
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Assessing the New Powell Monetary Strategy
- | F. A. Hayek Program F. A. Hayek Program
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Hayek, Cassel, and the Origins of the Great Depression
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A Critique of Interest Rate–Oriented Monetary Economics
Reframing the Keynesian vs. Neo-Fisherian Debate
- | Monetary Policy Monetary Policy
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The Neutral Level of NGDP and the NGDP Gap: Q3 2020
- | Monetary Policy Monetary Policy
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A Rule to Preserve Monetary Stability
- | Monetary Policy Monetary Policy
- | Working Papers Working Papers
Covid-19 and the Fed’s Monetary Policy
- | Monetary Policy Monetary Policy
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The Neutral Level of NGDP and the NGDP Gap: Q2 2020
- | Monetary Policy Monetary Policy
- | Research Papers Research Papers
Housing Policy, Monetary Policy, and the Great Recession
- | Monetary Policy Monetary Policy
- | Working Papers Working Papers
COVID-19 and the Fed’s Credit Policy
- | Monetary Policy Monetary Policy
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The Neutral Level of NGDP and the NGDP Gap: Q1 2020
- | Monetary Policy Monetary Policy
- | Policy Briefs Policy Briefs
The Stance of Monetary Policy: The NGDP Gap
A Practical Guide to NGDP Level Targeting
- | Monetary Policy Monetary Policy
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Reforming the Fed’s Toolkit and Quantitative Easing Practices: A Plan to Achieve Level Targeting
- | Monetary Policy Monetary Policy
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COVID-19 Pandemic, Direct Cash Transfers, and the Federal Reserve
Latest work in Monetary Policy
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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.

- | Monetary Policy Monetary Policy
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- | Macro Musings Macro Musings
Josh Hendrickson on the Treasury Standard and Global Dollar Dominance
From the collapse of the Bretton Woods system to the present, the US has continued to further implement its Treasury Standard across the globe as an effective economic and geopolitical tool.

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Mortgage Rates Creep Higher, Carmax Stock Plunges | Yahoo! Finance Live
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Julia Coronado on Productivity, Commercial Real Estate, and the Fed’s Soft Landing
As the Fed continues to seek a soft landing in 2024, election year politics and a shaky commercial real estate market are just a couple of the remaining challenges facing the central bank.

- | Monetary Policy Monetary Policy
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Buy the People: Why Everyone Loves To Hate the Fed | American Banker’s “Bank Shot”
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- | Radio Appearance Radio Appearance
Forget About an Economic Recession? | South Carolina Public Radio
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Isabel Schnabel on the ECB and its New Operational Framework
After conducting its most recent review, the ECB has made important changes to its operational framework that will ensure continued effectiveness, efficiency, flexibility, and robustness.

- | Monetary Policy Monetary Policy
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- | Macro Musings Macro Musings
Andrew Levin and Christina Parajon Skinner on *Central Bank Undersight: Assessing the Fed’s Accountability to Congress*
Strengthening reporting requirements and implementing external reviews are just a couple of avenues that Congress could pursue to restore effective oversight of the Fed.

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Fed Is Telling the Markets to ‘Curb Your Enthusiasm’ | Fox Business Network
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Anat Admati on the US Banking System and the Basel III Endgame
Requiring banks to fund with higher levels of capital is one way to promote a safer and healthier banking system.

- | Monetary Policy Monetary Policy
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- | Macro Musings Macro Musings
Steven Kamin and Mark Sobel on the Current State of Dollar Dominance
Given the liquidity, safety, and investor protections the dollar provides, its pivotal status as the world’s reserve currency provides numerous macroeconomic and geopolitical benefits.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Peter Williams on Interest Rates, Term Premium, and the Importance of Inflation Expectations
Adding additional macroeconomic data to factor models may help provide a more stable estimate of the neutral rate of interest, or R-star.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Bill Nelson on the Using the Discount Window for Liquidity Requirements and Its Implications for the Fed’s Balance Sheet
Removing the stigmatization associated with use of the discount window is one way for the Fed to improve its role as lender of last resort.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Eric Leeper on *A Fiscal Accounting of COVID Inflation*
While many economists cite a range of different factors as the cause of the COVID inflation surge, a large increase in federal pandemic related spending may be the most likely culprit.

- | Monetary Policy Monetary Policy
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Behind the Fed | Double Take
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- | Macro Musings Macro Musings
Jeffrey Lacker on Governance at the Federal Reserve
After falling behind the curve during the recent inflation episode, the Fed must consider reviewing its governance structure moving forward.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Mark Koyama on *How the World Became Rich: The Historical Origins of Economic Growth*
Geography, institutions, and culture are just a few of the key drivers that help explain economic growth throughout history.

- | Monetary Policy Monetary Policy
- | Mercatus Original Podcasts Mercatus Original Podcasts
- | Macro Musings Macro Musings
Gauti Eggertsson on the Post-Pandemic Inflation Surge and its Implications for Monetary Policy
Heading into the next framework review, there are numerous policy changes that the Fed could consider to help avoid inflationary crises in the future.

- | Monetary Policy Monetary Policy
- | Radio Appearance Radio Appearance
Do Both Sides of the Aisle Have It Wrong on Inflation | Lars Larson Show
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Jonathon Hazell on Phillips Curves, Wage Rigidity, and How to Measure R-Star
Despite some popular commentary, the Phillips curve continues to be an important idea in understanding the inflation rate.

Latest work in Monetary Policy
Latest work in Monetary Policy
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Inside the Fed’s Playbook for a Dollar Default
- | Monetary Policy Monetary Policy
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Money and the Rule of Law
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Saving, Investment, and Secular Stagnation
- | Monetary Policy Monetary Policy
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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
- | Monetary Policy Monetary Policy
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Inflation Is Uncontainable but Not Inevitable
Even if there are price increases, they’re unlikely to be steep.
- | Monetary Policy Monetary Policy
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There's Debate Over Stimulus Driving Inflation, but What Are the Facts?
- | Monetary Policy Monetary Policy
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Stop Worrying About Inflation
- | Monetary Policy Monetary Policy
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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.
- | Monetary Policy Monetary Policy
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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

- | Monetary Policy Monetary Policy
- | 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

- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
To Fix the Fed, We Need True Monetary Rules
- | Monetary Policy Monetary Policy
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Robin Harding on Abenomics and the 'Japanification' of Monetary Policy
- | Monetary Policy Monetary Policy
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George Selgin on Average Inflation Targeting and 'The Menace of Fiscal QE'
- | Monetary Policy Monetary Policy
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New Fed Approach Takes Inflation Targeting More Seriously
- | Monetary Policy Monetary Policy
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Another Example of Monetary Offset
- | Monetary Policy Monetary Policy
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A New Way to Manage Inflation
While the Fed’s new inflation target involves risks, it offers even greater opportunities

- | Monetary Policy Monetary Policy
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Pandemics Upend Classic Measures of Inflation
- | Monetary Policy Monetary Policy
- | Expert Commentary Expert Commentary
Quick Reads: Staying the Course
At the most recent FOMC meeting, Powell and the Fed commit to steadying the economy
