my new @nytopinion on the appointments of Powell and Brainard to lead the Fed next year! nytimes.com/2021/11/24/opi…
who's more hawkish and who's more dovish is the WRONG way to think about these two. reality rules.
Brainard is no softie on inflation nor is Powell. higher prices hurt people. no paycheck does too.

PS like how I got Dr. on her name. intentional and accurate.
given what we know now about the world -- yes, there's much we don't -- it's a bad time to start raising rates. it's clear from their public statements that Powell and Brainard agree too. simmer down, inflation fearmongers.
it's **not** enough to look at the aggregates. some have suffered during the crisis -- from the start until now -- than others. the Fed and other policymakers must remember that.
the big test the Fed will face is next year. I agree with their forecast now, but I also know that forecasting is hard always and near impossible now. we must prepare for the worst and hope for the best.
experience matters. they have it.

lift-off in 2015 -- when the Fed first raised rates above zero after the Great Recession -- was a tough call. the Fed debated it for a long time. Powell and Brainard were there. they will be there next year too. GOOD!
they admitted later that they were wrong, the Fed was wrong, how much room the recovery had to run. we all make mistakes. it's important to learn from them. the Fed is trying. the new framework was a commitment to do better next time, which is NOW.
while my piece is pretty heavy fan girling -- I was soooooo happy Biden chose them both -- it's not all sunshine and roses. the Fed must define its goals more clearly and build the intellectual case. Lael will be in a position to do that. thank goodness! must hustle!!
I am also not convinced that their philosophy about regulations is so far apart. watching them come together on the Community Reinvestment Act was AWESOME.

PS the Vice-Chair of Supervision appointment is the big one for the Fed's regulatory policy.
while I love the Fed, I do not entirely trust it.

being bold and new is not its strong suit. even so, Powell, Brainard, and all the Fed officials have made a commitment to the new framework. they and the other Fed officials will make the tough call. godspeed.
I will admit it. every time I have listened to Jay talk during the Covid crisis -- and that's every presser and many other events -- I end up crying at some point. his honesty and humility are the real deal and it's really needed. thank you!!

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More from @Claudia_Sahm

24 Nov
I agree that this would be a bad way to do policy. IT IS ABSOLUTELY NOT HOW THE FED IS DOING IT NOW.
remember last winter when job gains stalled as Covid surged? Fed made clear it'd be bad to cut rates. it takes time for lower rates to boost demand. they expected the wave to subside. if they cut then their boost to demand would come as the economy was strengthening on its own.
Read 4 tweets
24 Nov
"Powell “would disappoint many progressives and Fed watchers if he chooses to curb the Fed's efforts to boost the economy. But pressure will also grow more intense for the central bank to raise interest rates if price increases continue." @vtg2 politico.com/newsletters/mo…
"will grow more intense" hahaha. what's Larry (who is NOT progressive) going to say more? this summer he already compared Powell's approach to military decisions that led to disasters in Afghanistan and Vietnam. thehill.com/policy/finance…
I have more to say soon about my views on the Fed under Powell and Brainard's leadership in the coming years. I am not worried. reality will drive the Fed's decisions, as it should.

PS most progressives don't understand the Fed, so, of course, they will be disappointed.
Read 4 tweets
24 Nov
here's his full opinion piece (somewhat less jarring headline, thank you his editor) bloomberg.com/opinion/articl… it talks about how subjective assessments of women's contributions and potential could be holding them back in career advancement.
gendered norms on assessments are a thing (as any woman knows). they're infuriating too. I worked on a complicated project at the Fed for a Governor. took a lot to piece together the intellectual argument. turned out really well. praise I got from supervising officer? ...
Read 11 tweets
24 Nov
even so, I think the regulatory duties at the Fed are under-rated among most economists. frankly, it might be a more potent tool for economic inclusion than interest rates (since they are so low).
ok, here's my question to the Fed crowd: suppose, the Fed had not adopted its new framework in 2020. would they have raised rates already?
Read 5 tweets
22 Nov
re-upping some of my Substack posts on the Fed appointments. here's one version of my 'dream team' stayathomemacro.substack.com/p/substantial-… PS post is important too. Image
a bit more here on my thinking. (these appointments should've been made in August. better late than never.) stayathomemacro.substack.com/p/tapering-ain… note well, appointments of directors at Reserve Banks is very important too, which Board in DC approves. Image
I wrote a post yesterday on Lael Brainard's impeccable qualifications for the top job at the Fed and/or Treasury. I want them both next year. Chair/Vice-Chair combo would be incredibly strong. she deserves a leadership role on merits. we need her. stayathomemacro.substack.com/p/top-10-reaso…
Read 6 tweets
22 Nov
question: who are women writing economic / markets commentary regularly?

content aggregator asked me and the two names I had were @StephanieKelton and @Frances_Coppola others????
open offer to any women or men of color: if you want to write, a guest post on my Substack. it's in the aggregator and I have a good-sized subscription list.

get your expertise out to the world! it needs it!!!
part of why I blog -- my Substack is my 3rd iteration of one -- is because I got so frustrated that econ blogs were overrun with white men, most of them older.

the guys need some competition and you all need to know other voices in econ (especially macro) exist.
Read 5 tweets

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