This article is only available to Macro Hive subscribers. Sign-up to receive world-class macro analysis with a daily curated newsletter, podcast, original content from award-winning researchers, cross market strategy, equity insights, trade ideas, crypto flow frameworks, academic paper summaries, explanation and analysis of market-moving events, community investor chat room, and more.
The Making of Hawks and Doves (JME, 42-page read) Personal experiences of inflation influence the hawkish or dovish leanings of all members of FOMC since 1951. The resulting experience had a statistically significant impact on FOMC voting decisions, tone of their speeches and differences in their semi-annual inflation projections. Accounting for FOMC experiences yields better predictions of the fed funds rate.
Exchange Rate Policy in the COVID-19 Pandemic (PIIE, 9 min read) Economies with significant foreign-currency debt, sharp depreciation could be more inflationary than any benefit from greater exports (amid the crisis). Policies to help these economies include: providing access to central bank swap lines, increasing lending capacity, keeping markets open for exports from these countries and coordinated direct FX intervention by reserve-currency countries.
Even As We Dive Into Recession, Some Worry About The Return Of Inflation (David Smith Economics, 6 min read) Boost in money supply growth (monetary financing of government spending and QE), rapid post-crisis rebound in the economy and supply shortages (as international borders open only gradually) could be inflationary.