With unemployment standing at 3.7 percent, down from 6.3 percent when President Biden took office, and labor force participation up 1.5 percent over the same period, it's hard to imagine American labor has been disserved by the President's fiscal policies. Macro-indicators show economic growth is strong and a recession unlikely. A year ago, almost every economist forecasted a recession for 2023, but real GDP stands at 4.9 percent for Q3, and Q4 will be strong as well, although likely lower. For the most part, Americans who want work can find work—and this isn’t by accident. From the first day ..read more

Public discourse surrounding the US Federal Reserve has been mired as of late by widespread discontent with regard to the series of interest rate hikes that have taken place over the past eight months. The common theme running through these critiques has been that the Fed, through its leadership on FOMC, has brought much difficulty upon the American economy. Whether it’s those making arguments that interest rate moves have threatened growth while in no way improving prevailing inflation, or that the Fed has moved far too slowly in its initial response to rising prices, both narratives lack a ..read more

Inflation numbers released last Friday by the Bureau of Labor Statistics showed an annual increase of 6.8% in the Consumer Price Index, a figure larger than any month on record since 1982. This number, in and of itself, is no cause for alarm; however, when we examine it within the larger economic context—in particular, the fact there have been six straight months of higher-than-expected inflation—an alarming picture begins to form, and when we juxtapose that picture with the one the Fed forecasted months ago (and even the one Federal Reserve Open Market Committee (FOMC) described in its Novem ..read more

Much talk in recent weeks has been about the need for Congress to once again raise the debt ceiling, otherwise risk widespread default on US government debt. If you are experiencing some déjá vu, you are not alone. Debt ceiling standoffs have become a staple in American politics in recent decades, with one party using the debt ceiling to play the proverbial game of chicken with the US economy, and the other hoping a deal is hammered out before it’s too late. But why exactly do we have a debt ceiling? What is its purpose, and is it being used in a way that achieves that purported goal? The deb ..read more

PBS Frontline released a documentary Tuesday, The Power of the Fed, and it has everyone talking—and not just those who work in finance. Many friends and colleagues have reached out to me for my interpretation of the program, so I thought I would write a quick post about what I think about it. Let me first say that I encourage all of The Demand Side readers to watch the program because PBS is great, and the special is very informative and easily digestible for those less familiar with the inner workings of modern central banks. Having said this, the program wasn't without bias. James Jacoby, F ..read more

For those who have seen the opening episode of Aaron Sorkin’s The Newsroom, one of the first things that typically comes to mind is the line: “You are a member of the Worst, Period, Generation, Period. Ever, Period!” In an elitist diatribe about millennial political apathy, protagonist Will McAvoy, a news anchor played by Jeff Daniels, tells a quixotic college sophomore quite tersely that she is a member of the “Worst. Generation. Ever,” and that her question of “what makes America the greatest country in the world?” belies factual evidence. If you haven't seen the show, I highly recommend it ..read more

In an interview on CNBC's Closing Bell last week, Federal Reserve Vice Chairman Richard Clarida made clear to viewers that now isn't the time to begin tapering the Fed's easing policies and certainly not the time to consider an overall tightening by raising the policy rate above its current range of 0-25 basis points. With inflation concerns occupying the majority of economic discourse, Clarida maintained the Federal Open Market Committee’s (FOMC) wait-and-see policy approach by saying, "We’re still a long way from our goals, and in our new framework, we want to see actual progress and not ju ..read more

President Joe Biden is doing something economists and policy wonks have been begging legislators to do for years yet no party has been able to get it done: pass an infrastructure bill that actually rebuilds the country and creates thousands of jobs in the process. For those of us who live in the DC area, each year we get to witness the excitement around something called Infrastructure Week. Infrastructure Week is a five-day push to address the dire state of our nation's infrastructure—whether physical infrastructure, such as roads, dams, bridges, and the electrical grid; or cyber infrastructu ..read more

With the Biden administration starting to hit its stride in its second week, putting forth policy proposals that, for the most part, are good for the country, I feel it’s necessary to step back and take a breath. It’s been a minute since policy coming out of the White House has been worthy of debate, and many of us—policymakers included—are having a little trouble getting our bearings. It goes without saying there is plenty that needs to be done by the Biden administration in the coming months. Our economy is holding on by a thread, the pandemic seems to be getting worse even though vaccines ..read more

Over the last week there have been plenty of articles outlining just how inadequate the latest round of stimulus is, given the turmoil millions of Americans have endured over the last nine months. While I agree it’s embarrassing our leaders think a $600 stimulus check is sufficient assistance for those who have been adversely affected by the Covid-19 economic slowdown, I’m not here to belabor that point. We all know the bill was laughable. What’s really sadistic, though, is how certain Republicans in Congress used the relief bill to slip in language that limits the tools the Federal Reserve c ..read more