Random question for people who worry that the Fed could "run out of bullets" because the policy rate is already fairly close to zero.
Couldn't the Fed not stimulate further by saying something like "We're never going to hike again until the unemployment rate falls below 2.5%"?
Seems like there's a virtually unlimited number of forward guidance approaches that could be powerful and blunt?
"We're not going to worry about inflation until we see 6 prints in a row of core CPI over 3%." That's another one. Seems like there's plenty of bullets.
I've always thought that, in retrospect, in 2010 after the Fed was at zero, the Fed should've just announced a multi-year vacation. No meetings, with the message that they'd check in again in 2015.
Anyway, this wouldn't be my preference because I think fiscal policy is more powerful, but I don't think the limits to the Fed's efficacy should be viewed in terms of some imaginary number of available bullets.
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@tracyalloway and I talked to @NNNIncome about the ongoing scarcity of switchgears and transformers, and how you have virtually complete buildings going empty because they can't get one critical missing part.
As @NNNIncome explained there are basically five companies that make this gear. And thanks to booming demand (chips, AI, electrification etc.) they're still absolutely slammed.
He ordered a switchgear a year ago, and was just told it'd be another year's wait.
@NNNIncome And in the meantime, he's carrying an entirely completed building (sans-switchgear), financed at some of the highest rates in decades, for another year, meaning a need to roll debt, accumulate more interest etc.
A 4-hand on the unemployment rate would have really set off some alarm bells. The fact that U3 fell, and thus pushes back the triggering of Sahm Rule removes the impulse for immediate rate cuts.
The company was cofounded by @sama, whose work at OpenAI is contributing to the environment where we might feel the need to get their eyeballs scanned, in order to biometrically prove that they're not a bot.
On this episode we talked about privacy, the technology, what AI could do to the economy, deepfakes, scams, why they decided to build eyeball scanning orbs, how they constructed them. And much more
I've been kind of following markets in one way or another for 25 years now, and I still don't know that much. But one thing that's true that I've observed is that every time the animal spirits get going, people start buying $PLUG
Wrote about it in yesterday's newsletter.
This has got to be one of my favorite charts ever.
$PLUG share price (white) vs. $PLUG market cap (yellow)
With this morning's move, the stock is up 60% since mid-may
If you're interested in State Capacity and "can governments build things" and all that stuff, there's so much in here that's eye opening and insightful on these questions. bloomberg.com/news/articles/…
@pahlkadot@allafarce I don't even know where to begin with the various fascinating parts of this conversation, because there were so many.
One darkly hilarious nugget is that during the UI emergency in 2020, California hired people like crazy, and the effect was to slow claims processing down.
@pahlkadot@allafarce This was also really interesting about government RFPs, their complexity, and why the nature of the budgeting process works against good practices in building software.