Paul Kasriel's Contributions

Barring an outright decline in November nonfarm payrolls, the Fed’s Federal Open Market Committee (FOMC) will raise its policy interest rates by a quarter of a percentage point on December 16. I submit that this tightening will go down in annals of Fed history as one of the most preemptive...

A couple of days before the September 16-17 FOMC meeting, I happened to be listening to the NPR program, “On Point”, the subject of which was the appropriateness of a Fed policy interest rate increase at that time.

The late, great Milton Friedman used to preach that you don’t assess the degree of monetary policy restriction or accommodation by the level and movement of interest rates but rather by the behavior of monetary quantities.

Last week, Fed Chairperson Yellen indicated that the Fed was likely to raise its policy interest rates sometime before year end. Given the behavior of the sum of commercial bank credit and depository institution reserves at...

It seems as though there usually is a “but” when the unemployment rate falls by more than expected by the cognoscenti. The consensus estimate for the June unemployment rate was 5.4%, down from May’s 5.5%.

As shown in Chart 1, 23 quarters after the 2009:Q2 business-cycle trough, real GDP growth has been the weakest of any 23-quarter post-cycle trough starting with that of 1961:Q2. Although I believe that the nature of the cause...

Back on January 25, I penned a piece entitled “The Fed – Lucky or Smart?”. In that commentary I argued that the Fed was managing the supply of total thin-air credit, i.e., the sum of commercial bank credit and...

Looking past the large upward revision to November 2014 nonfarm payrolls, you might have noticed that the U.S. economy has entered, in the words of the Federal Reserve’s version of Chance, the Gardener...

Given the rapid growth in total thin-air credit, i.e., the credit created by the Fed and depository institutions, during most of 2014, the Fed was correct in phasing down the amount of securities it was purchasing if...

If relatively robust growth in thin-air credit was a major factor accounting for 2014’s bountiful U.S. economic harvest, as I believe it was, then 2015’s “harvest” is likely to be considerably less bountiful.

As quantitative easing comes to an end (apparently) by the Fed and is taken up by the European Central Bank (ECB), let’s compare the behavior of nominal domestic demand in each central bank’s economy and venture a reason for any differences.

I subscribe to the tenet espoused by the late Professor Milton Friedman that inflation is a monetary phenomenon. When I speak of inflation, I include not only the behavior of prices of goods and services but also the behavior of the prices of assets.

Contrary to what the editors of The Economist and many mainstream economic analysts assert (but don’t verify), QE has not boosted the American economy by lowering corporate bond yields.

Back on March 13, David Malpass, president of Encima Global LLC, wrote an op-ed for The Wall Street Journal entitled “The Fed's Taper Is Already Paying Off”. In this op-ed, Malpass argues that the Fed’s purchases of securities, aka Quantitative Easing (QE), have inhibited bank lending to small businesses, aka job creators.

Upon awakening from my winter hibernation way up here in beautiful northeastern Wisconsin, I have noticed that bank asset managers have been anything but hibernating. Rather, they have been quite busy expanding their loans and securities.

In the press conference immediately following the December 17-18, 2013 FOMC meeting, Fed Chairman Bernanke indicated that it was the FOMC’s current plan to have terminated Federal Reserve outright securities purchases by the end of 2014...

I know that being a Debbie Downer gets more face time on cable news, but after looking at the Fed’s latest Financial Accounts of the U.S. report, formerly known as the Flow-of-Funds report, I cannot contain my optimism about the economy’s prospects in the New Year.

If your Thanksgiving family dinner conversation is anything like mine this Thursday, it will be dominated by a discussion of how the U.S. economy and its financial markets will be behaving after nearly a year of Dr. Janet Yellen at the helm of the Fed.

One of the “casualties” of the federal government shutdown is the suspension of official federal government statistics measuring the performance of the U.S. economy.

The Fed decided on September 18 to maintain its rate of securities purchases at $85 billion per month rather than reducing or “tapering” the amount of its monthly securities purchases as was, for reasons not entirely clear to me, was widely expected by the financial market cognoscenti.