Ben Harris on the Fiscal Health of the US Government

Mickey Levy is Chief Economist for the Americas and Asia for Berenberg Capital Markets, a Wall Street veteran, and a longstanding member of the Shadow Open Market Committee. He and his co-author, Charles Plosser, also have a new paper out titled, *The Fed’s Strategic Approach to Monetary Policy Needs a Reboot.* Mickey joins David on Macro Musings to discuss this paper and its implications for the upcoming Federal Reserve framework review. David and Mickey also discuss the impact and importance of a flat Phillips curve, the Fed’s policy mistakes in the wake of its new flexible average inflation targeting (FAIT) framework, recommendations for how the central bank should approach the next framework review, and much more.   Transcript for this week’s episode.   Mickey’s Twitter: @mickeylevy Mickey’s website   David Beckworth’s Twitter: @DavidBeckworth Follow us on Twitter: @Macro_Musings   Check out our new AI chatbot: the Macro Musebot! Join the new Macro Musings Discord server!   Join the Macro Musings mailing list! Check out our Macro Musings merch!   Related Links:   *The Fed’s Strategic Approach to Monetary Policy Needs a Reboot* by Mickey Levy and Charles Plosser   Timestamps:   (00:00:00) – Intro   (00:01:50) – Mickey Levy’s Career Path and Takeaways from the Most Recent Hoover Monetary Policy Conference   (00:07:24) – What Shaped the First Framework Review?   (00:11:56) – The Fed’s Addition of “Symmetric” Inflation   (00:16:32) – Price Level Drift, Deflationary Fears, and Inflation Expectations at the Fed   (00:23:33) – The Impact and Importance of a Flat Phillips Curve   (00:27:34) – Breaking Down the Elements of FAIT and the Fed’s Policy Mistakes   (00:42:11) – Recommendations for the Fed’s Upcoming Framework Review   (00:57:54) – Outro

17 Juni 202458min

Lars Christensen is a founding member of the market monetarist tradition, an entrepreneur in the AI space, and is also a returning guest to Macro Musings. Lars rejoins the podcast to talk about AI and its implications for the economy and for monetary policy. David and Lars also discuss the basics and implications of dynamic pricing, AI’s growing use within econometric analysis, how AI will impact the Fed and its policymaking, and much more.   Transcript for this week’s episode.   Lars’s Twitter: @MaMoMVPY Lars’s blog   David Beckworth’s Twitter: @DavidBeckworth Follow us on Twitter: @Macro_Musings   Check out our new AI chatbot: the Macro Musebot! Join the new Macro Musings Discord server!   Join the Macro Musings mailing list! Check out our Macro Musings merch!   Related Links:   *From Merchants to Quants: The Digital Revolution in Retail* by Lars Christensen   *Less Than Zero: The Case for a Falling Price Level in a Growing Economy* by George Selgin   Timestamps:   (00:00:00) – Intro   (00:01:16) – Lars’s Move from Macro to AI   (00:08:02) – The Basics and Implications of Dynamic Pricing   (00:16:17) – Using AI for Econometric Analysis   (00:23:54) – The Implications of AI for the Economics Field   (00:35:45) – How Will AI Impact the Federal Reserve and its Policymaking   (00:38:55) – Deflation as a Response to an AI Driven Productivity Shock   (00:52:08) – Outro   Photo Credit: Nordnet Bank

10 Juni 202452min

Ryan Bourne is the R. Evan Scharf Chair for Public Understanding of Economic at the Cato Institute, and he is also the editor and contributor to a new book titled, *The War on Prices: How Popular Misconceptions about Inflation, Prices, and Value Create Bad Policy.* Ryan joins Macro Musings to talk about this new book, and specifically, the history and functionality of rent and price controls, the basics of dynamic pricing, the root causes of inflation, and a lot more.   Transcript for this week’s episode.   Ryan’s Twitter: @MrRBourne Ryan’s Cato profile   David Beckworth’s Twitter: @DavidBeckworth Follow us on Twitter: @Macro_Musings   Check out our new AI chatbot: the Macro Musebot! Join the new Macro Musings Discord server!   Join the Macro Musings mailing list! Check out our Macro Musings merch!   Related Links:   *The War on Prices: How Popular Misconceptions about Inflation, Prices, and Value Created Bad Policy* by Ryan Bourne et al.   *I, Pencil* by Leonard Read   *Forty Centuries of Wage and Prices Controls: How Not to Fight Inflation* by Robert Schuettinger and Eamonn Butler   *Shock Values: Prices and Inflation in American Democracy* by Carola Binder   Timestamps:   (00:00:00) – Intro   (00:01:05) – The Background Motivation for “The War on Prices*   (00:06:32) – The Definition and Importance of Prices   (00:12:41) – The Parable of “I, Pencil”   (00:18:39) – Rationing on Quality or Quantity: Rent Control   (00:26:39) – The World War II Experience with Price Controls   (00:32:58) – Price and Wage Controls During the Nixon Administration   (00:35:48) – The Effects of a Minimum Wage   (00:38:38) – The Basics of Dynamic Pricing   (00:44:03) – Defining Inflation and Establishing its Sources   (00:56:08) – Was the Recent Inflation Surge Actually Optimal?   (00:59:51) – Outro

3 Juni 20241h

George Selgin is a senior fellow and director emeritus of the Center for Monetary and Financial Alternatives at the Cato Institute. George is also a frequent guest of the podcast, and he rejoins Macro Musings to talk about some of the recent developments in the monetary and fiscal policy space. Specifically, David and George discuss recent updates regarding Fed master accounts, the problematic aspects of the Fed’s balance sheet, why a second Trump term would threaten central bank independence, and much more.   Transcript for this week’s episode.   George’s Twitter: @GeorgeSelgin George’s Cato profile   David Beckworth’s Twitter: @DavidBeckworth Follow us on Twitter: @Macro_Musings   Check out our new AI chatbot: the Macro Musebot! Join the new Macro Musings Discord server!   Join the Macro Musings mailing list! Check out our Macro Musings merch!   Related Links:   Caitlin Long’s tweet regarding the Fed’s special treatment for approving master accounts   *Public comments on the Proposed Guidelines for Evaluating Requests for Accounts and Services* by George Selgin   *Custodia Bank Inc v. Federal Reserve Board of Governors* Court documents from the Wyoming District Court   *Annual Report on Open Market Operations (2023)* by the Federal Reserve Bank of New York   *Trump Allies Draw Up Plans to Blunt Fed’s Independence* by Andrew Restuccia, Nick Timiraos, and Alex Leary   *Trump Advisers Discuss Penalties for Nations That Move Away From the Dollar* by Saleha Mohsin, Jennfier Jacobs, and Nancy Cook   *Hayek versus Keynes on How the Price Level Ought to Behave* by George Selgin   *The Menace of Fiscal QE* by George Selgin   *George Selgin on False Dawn: The New Deal and the Promise of Recovery* by Macro Musings   Timestamps:   (00:01:36) – Intro   (00:06:26) – Updates on Fed Master Accounts and the Custodia Case   (00:17:57) – Problematic Aspects of the Fed’s Balance Sheet   (00:22:50) – The Importance of the Overnight Unsecured Interbank Lending Market   (00:34:26) – Responding to the Jared Bernstein Incident   (00:46:33) – Donald Trump, Central Bank Independence, and Dollar Dominance   (00:56:54) – Outro

27 Maj 202457min

Roberto Perli is the manager of the System Open Market Account (SOMA) and a senior leader in the New York Fed’s Markets Group. In his role, Roberto is responsible for implementing monetary policy at the direction of the Federal Open Market Committee (FOMC). Roberto is also a returning guest to the podcast, and he rejoins Macro Musings to talk about a recent speech he made titled, *Balance Sheet Reduction: Progress to Date and a Look Ahead.* Specifically, David and Roberto discuss the Fed’s recent balance sheet activities, the basics and functionality of the overnight reverse repo facility, the importance of slowing down the Fed’s balance sheet runoff, and much more.   Transcript for this week’s episode.   Roberto’s NY Fed profile Roberto’s Twitter: @R_Perli   David Beckworth’s Twitter: @DavidBeckworth Follow us on Twitter: @Macro_Musings   Check out our new AI chatbot: the Macro Musebot! Join the new Macro Musings Discord server!   Join the Macro Musings mailing list! Check out our Macro Musings merch!   Related Links:   *Balance Sheet Reduction: Progress to Date and a Look Ahead* - Remarks by Roberto Perli at the 2024 Annual Primary Dealer Meeting, Federal Reserve Bank of New York   Timestamps:   (00:00:00) – Intro   (00:04:49) – Breaking Down the Role of SOMA Manager   (00:08:43) – Recapping the Fed’s Balance Sheet Activities   (00:11:04) – How to Think About Quantitative Tightening   (00:13:19) – Breaking Down the Overnight Reverse Repo Facility   (00:20:42) – Slowing Down the Runoff and the Future of QT   (00:26:48) – How to Determine the Critical Level of Reserves   (00:33:03) – The Structural Demand for Bank Reserves Over Time   (00:38:55) – The Advantages of the Floor Operating System   (00:47:49) – Reserve Supply Focus Moving Forward   (00:49:44) – Outro

20 Maj 202450min

Mary Daly is the president and CEO of the Federal Reserve Bank of San Francisco, a voting member of the Federal Open Market Committee (FOMC), and is also a 28-year veteran of the Federal Reserve System. President Daly joins David for this special live episode of Macro Musings to talk about her non-linear career path to the world of monetary policy, the long-term economic impacts of AI, the future outlook for Fed policy and the Fed’s framework, and much more.   Transcript for this week’s episode.   Mary’s Twitter: @MaryDalyEcon Mary’s San Francisco Fed profile   David Beckworth’s Twitter: @DavidBeckworth Follow us on Twitter: @Macro_Musings   Check out our new AI chatbot: the Macro Musebot! Join the new Macro Musings Discord server!   Join the Macro Musings mailing list! Check out our Macro Musings merch!   Related Links:   *Facts, Fears, and Functionality of NGDP Level Targeting* by David Beckworth   Timestamps:   (00:00:00) – Intro   (00:01:30) – Mary Daly’s Background   (00:06:09) – Recent Inflationary Trends and the Future of Fed Policy   (00:15:39) – The Trajectory of R-Star Over the Medium to Long-Run   (00:19:06) – The Long-Term Economic Impacts of AI   (00:29:51) – Expectations for the Upcoming Fed Framework Review   (00:33:35) – Prospects for Nominal GDP Targeting at the Fed   (00:36:58) – Fed Policymaking During an Election Year   (00:38:16) – Audience Q&A Period   (01:01:09) – Outro

13 Maj 20241h 1min

Dan Katz and Stephen Miran are former senior advisors for the US Treasury Department and are currently adjunct fellows at the Manhattan Institute. Dan and Stephen have also written a new paper titled, *Reform the Federal Reserve’s Governance to Deliver Better Monetary Outcomes,* and they join Macro Musings to talk about this paper and the proposed reforms for the Federal Reserve outlined in it. Specifically, Dan, Steve, and David discuss the ever-expanding reach of the Fed, its role as debt manager and bank regulator, the current issue with the central bank’s personnel, and a lot more.   Transcript for this week’s episode.   Stephen’s Twitter: @SteveMiran Stephen’s Manhattan Institute profile   Dan’s Twitter: @DanielScottKatz Dan’s Manhattan Institute profile   David Beckworth’s Twitter: @DavidBeckworth Follow us on Twitter: @Macro_Musings   Check out our new AI chatbot: the Macro Musebot! Join the new Macro Musings Discord server!   Join the Macro Musings mailing list! Check out our Macro Musings merch!   Related Links:   *Reform the Federal Reserve’s Governance to Deliver Better Monetary Outcomes* by Dan Katz and Stephen Miran   Timestamps:   (00:00:00) – Intro   (00:04:20) – The Fed’s Issue of Picking Winners and Losers   (00:09:17) – The Fed’s Role as Bank Regulator   (00:12:53) – The Ever-Expanding Reach of the Fed   (00:17:50) – The Fed as a Debt Manager   (00:23:33) – What Should the Fed Do in a Zero Lower Bound Environment   (00:27:26) – Personnel is Policy: The Issue with Fed Personnel   (00:29:55) – Options for Personnel Reform at the Fed   (00:38:22) – Making the Fed President Selection Process More Robust   (00:47:28) – The Nature of Debate at the Fed   (00:50:53) – The Scope for Change at the Fed   (00:53:21) – Outro

6 Maj 202454min

Richard Clarida is a professor of economics at Columbia University, a managing director at PIMCO, and was most recently the Vice Chair of the Federal Reserve Board of Governors. Richard rejoins David for this special bonus segment to talk about his interest in music and his first studio album, *Time No Changes.*   Richard’s Federal Reserve profile Richard’s PIMCO archive   David Beckworth’s Twitter: @DavidBeckworth Follow us on Twitter: @Macro_Musings   Check out our new AI chatbot: the Macro Musebot! Join the new Macro Musings Discord server!   Join the Macro Musings mailing list! Check out our Macro Musings merch!   Related Links:   *Time No Changes* by Richard Clarida   *Richard Clarida on FAIT, R-Star, and the Future of the Fed’s Framework* by Macro Musings

1 Maj 20246min