Samim Ghamami on the Treasury Markets Impact on the Future Path of Interest Rates and Inflation

Pat Parkinson is a senior fellow at the Bank Policy Institute and a 30-year veteran of the Federal Reserve system, where he served as director of the Division of Banking Supervision and Regulation. During that time, he was also a member of the Basel Committee on Banking and advised Alan Greenspan, Ben Bernanke, and Tim Geithner on financial market issues. Pat joins Macro Musings to discuss the treasury market meltdown in March 2020, as well as what we can do moving forward to avoid this issue from happening again. Specifically, David and Pat outline the implementation of a standing repo facility, changes to the supplemental leverage ratio, expanded central clearing, and increased data collection as possible solutions to this problem.     Transcript for the episode can be found here.   Pat’s BPI profile: https://bpi.com/people/pat-parkinson/   Related Links:   *Enhancing Liquidity of the U.S. Treasury Market Under Stress* by Nellie Liang and Pat Parkinson https://www.brookings.edu/research/enhancing-liquidity-of-the-u-s-treasury-market-under-stress/   *US Treasuries: The Lessons from March’s Market Meltdown* by Colby Smith and Robin Wigglesworth https://www.ft.com/content/ea6f3104-eeec-466a-a082-76ae78d430fd   David’s blog: macromarketmusings.blogspot.com David’s Twitter: @DavidBeckworth

1 Mar 202156min

Kathy Bostjancic is the chief US financial economist at Oxford Economics and joins Macro Musings to discuss the outlook for monetary and fiscal policy in 2021 as well as in financial markets. Specifically, David and Kathy discuss the prospects for Fed policy and personnel under the Biden Administration, immediate concerns facing the Fed as the COVID pandemic continues into 2021, what steps the Fed can take to make their new AIT framework credible, how large scale asset purchases have impacted asset prices and the real economy, and much more.   Transcript for the episode can be found here.   Kathy’s Twitter: @BostjancicKathy Kathy’s Oxford Economics profile: https://www.oxfordeconomics.com/about-us/staff/267824/kathy-bostjancic   David’s blog: macromarketmusings.blogspot.com David’s Twitter: @DavidBeckworth

22 Feb 202148min

Ricardo Reis is a professor of economics at the London School of Economics and a returning guest to the podcast. Ricardo rejoins Macro Musings to talk about central bank swap lines, the importance of fiscal sustainability, and the outlook for inflation in advanced economies. David and Ricardo also discuss safe asset alternatives, and how to think about inflation, debt, and deficits in a more nuanced way.   Transcript for the episode can be found here.   Ricardo’s Twitter: @R2Rsquared Ricardo’s LSE profile: https://personal.lse.ac.uk/reisr/   Related Links:   *Central Bank Swap Lines* by Saleem Bahaj and Ricardo Reis https://voxeu.org/article/central-bank-swap-lines   *Central Bank Swap Lines During the Covid-19 Pandemic* by Saleem Bahaj and Ricardo Reis https://personal.lse.ac.uk/reisr/papers/20-covicbswaps.pdf   *The Constraint on Public Debt When r https://iepecdg.com.br/wp-content/uploads/2020/12/mpkrg-201112.pdf   *Inflating Away the Public Debt? An Empirical Assessment* by Jens Hilscher, Alon Raviv, and Ricardo Reis https://www.nber.org/system/files/working_papers/w20339/w20339.pdf   *The New Global Financial Safety Net: Struggling for Coherent Governance in a Multipolar System* by Beatrice Weder di Mauro and Jeromin Zettelmeyer https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2946452   David’s blog: macromarketmusings.blogspot.com David’s Twitter: @DavidBeckworth

15 Feb 20211h 1min

Robert Kaplan is the president and CEO of the Federal Reserve Bank of Dallas. Previously, he was a professor and Associate Dean at Harvard Business School, and prior to that was a Vice Chairman of Goldman Sachs. Robert is a returning guest to the podcast, and he rejoins Macro Musings to discuss the Fed's new framework, inflation, interest rates and more. Specifically, David and Robert talk about COVID’s impact on FOMC operations, how demographic trends are impacting productivity, the Fed’s expanding balance sheet, its average inflation targeting framework, and more.   Transcript for the episode can be found here.   Robert’s Twitter: @RobSKaplan Robert’s Dallas Fed profile: https://www.dallasfed.org/en/fed/bios/kaplan.aspx   David’s blog: macromarketmusings.blogspot.com David’s Twitter: @DavidBeckworth

8 Feb 202141min

Daniel Griswold is a senior affiliated scholar at the Mercatus Center and a nationally recognized expert on trade and immigration policy. Dan is also a returning guest is to the podcast, and joins Macro Musings to talk about immigration policy and the outlook for trade policy with the new Biden Administration. Specifically, David and Dan discuss the major demographic decline in the US, and how greater levels of immigration and can solve many of America’s economic concerns.    Transcript for the episode can be found here.   Dan’s Twitter: @danielgriswold Dan’s Mercatus profile: https://www.mercatus.org/scholars/daniel-griswold   Related Links:   *More Immigration Needed to Offset COVID-19 and America’s Demographic Decline* by Daniel Griswold https://www.mercatus.org/publications/trade-and-immigration/more-immigration-needed-offset-covid-19-and-america%E2%80%99s-demographic   *Half a Million Fewer Children? The Coming COVID Baby Bust* by Melissa Kearney and Phillip Levine https://www.brookings.edu/research/half-a-million-fewer-children-the-coming-covid-baby-bust/   *World Population Prospects 2019: Highlights* by the Department of Economic and Social Affairs, Population Division at the United Nations https://population.un.org/wpp/Publications/Files/WPP2019_Highlights.pdf   *The Next Hundred Million: America in 2050* by Joel Kotkin https://www.penguinrandomhouse.ca/books/298866/the-next-hundred-million-by-joel-kotkin/9781101195703   *Fertility, Mortality, Migration, and Population Scenarios for 195 Countries and Territories from 2017 to 2100: A Forecasting Analysis for the Global Burden of Disease Study* by Stein Emil Vollset et al. https://www.thelancet.com/article/S0140-6736(20)30677-2/fulltext   *Clashing over Commerce: A History of US Trade Policy* by Douglas Irwin https://press.uchicago.edu/ucp/books/book/chicago/C/bo24475328.html   David’s blog: macromarketmusings.blogspot.com David’s Twitter: @DavidBeckworth

1 Feb 202149min

Sam Bell is the policy director of Employ America, a think tank dedicated to having the economy run at full employment levels. Sam is also known on FOMC Twitter as an influencer when it comes to nominations for the Board of Governors. Sam returns to Macro Musings to talk about what 2021 likely has in store for the Fed. Specifically, Sam and David discuss Fed Vice Chair Richard Clarida’s vision for temporary price level targeting, the prospects of Jay Powell and Lael Brainard (and others) for the next Fed chair, the significance of Janet Yellen’s treasury secretary appointment, and the political pressures facing the Fed in 2021.   Transcript for the episode can be found here.   Sam’s Twitter: @sam_a_bell About Employ America: https://employamerica.org/about/   Related Links:   *Monetary Policy Strategies for a Low-Rate Environment* by Ben Bernanke, Michael Kiley, and John Roberts https://www.aeaweb.org/articles?id=10.1257/pandp.20191082   David’s blog: macromarketmusings.blogspot.com David’s Twitter: @DavidBeckworth

25 Jan 202150min

Caleb Watney is the director of innovation policy at the Progressive Policy Institute (PPI) and he joins Macro Musings to talk about his recent piece, *Cracks in the Great Stagnation* and the reasons why we should all be techno-optimists. Specifically, David and Caleb discuss greater skilled immigration, further government R&D spending, innovative energy solutions, and more as ways to help repair an economy plagued by secular stagnation.   Transcript for the episode can be found here.   Caleb’s Twitter: @calebwatney Caleb’s PPI profile: https://www.progressivepolicy.org/people/caleb-watney/   Related Links:   *Cracks in the Great Stagnation* Caleb Watney https://www.agglomerations.tech/cracks-in-the-great-stagnation/   *The Egghead Gap* by Caleb Watney https://www.thenewatlantis.com/publications/the-egghead-gap   *Are Ideas Getting Harder to Find?* by Nicholas Bloom, Charles Jones, John Van Reenen, and Michael Webb https://www.aeaweb.org/articles?id=10.1257/aer.20180338   *Is the Rate of Scientific Progress Slowing Down?* by Tyler Cowen and Ben Southwood https://docs.google.com/document/d/1cEBsj18Y4NnVx5Qdu43cKEHMaVBODTTyfHBa8GIRSec/edit   *The Productivity J-Curve: How Intangibles Complement General Purpose Technologies* by Erik Brynjolfsson, Daniel Rock, and Chad Syverson https://www.nber.org/system/files/working_papers/w25148/w25148.pdf   David’s blog: macromarketmusings.blogspot.com David’s Twitter: @DavidBeckworth

18 Jan 202155min

Scott Sumner is the Ralph G. Hawtrey Chair of Monetary Policy at the Mercatus Center and a returning guest to Macro Musings. He joins the podcast today to talk about his ongoing work on the Princeton School of Macroeconomics as well as his thoughts on monetary policy in 2021. Specifically, David and Scott discuss the economic contributions of various different Princeton economists as well as how the central bank can overcome inflationary fears and establish further institutional credibility.   Transcript for the episode can be found here.   Scott’s automated Twitter: @MoneyIllusion Scott’s blog: https://www.themoneyillusion.com/ Scott’s Mercatus profile: https://www.mercatus.org/scholars/scott-sumner   Related Links:   *It’s Baaack: Japan’s Slump and the Return of the Liquidity Trap* by Paul Krugman, Kathryn Dominguez, and Kenneth Rogoff https://www.brookings.edu/bpea-articles/its-baaack-japans-slump-and-the-return-of-the-liquidity-trap/   *Great Expectations and the End of the Depression* by Gauti Eggertsson https://www.jstor.org/stable/29730131?seq=1   *The Zero Bound on Interest Rates and Optimal Monetary Policy* by Gauti Eggertsson and Michael Woodford https://www.brookings.edu/bpea-articles/the-zero-bound-on-interest-rates-and-optimal-monetary-policy/   *Methods of Policy Accommodation at the Interest-Rate Lower Bound* by Michael Woodford https://kansascityfed.org/publicat/sympos/2012/mw.pdf   *Bernanke’s No-arbitrage Argument Revisited: Can Open Market Operations in Real Assets Eliminate the Liquidity Trap?* By Gauti Eggertsson and Kevin Proulx https://www.nber.org/papers/w22243   *Japanese Monetary Policy: A Case of Self-Induced Paralysis?* by Ben Bernanke https://www.princeton.edu/~pkrugman/bernanke_paralysis.pdf   *Implementing Optimal Policy through Inflation-Forecast Targeting* by Lars Svensson and Michael Woodford https://www.nber.org/papers/w9747   *Escaping from a Liquidity Trap and Deflation: The Foolproof Way and Others* by Lars Svensson https://www.nber.org/papers/w10195   David’s blog: macromarketmusings.blogspot.com David’s Twitter: @DavidBeckworth

11 Jan 202159min