Economic growth over the second half of 2023 was brisk. Real GDP expanded at a 4 percent annual rate over the second half of 2023, up from a 2 percent rate in the first half and only ¾ percent over all of 2022. Moreover, initial claims for unemployment insurance thus far in January are not … Continue reading Further Disinflation?
On the Other Hand, The Inflation Battle Has Not Yet Been Won
A widespread view has developed that the Fed has slayed the inflation beast and that declines in interest rates are just around the corner. Participants in the federal funds futures market have priced in declines in the target for the federal funds rate starting next spring and continuing through the rest of the year. They … Continue reading On the Other Hand, The Inflation Battle Has Not Yet Been Won
Obstacles to a Soft Landing
A growing chorus of analysts has been reading recent economic news–especially consumer prices--to be suggesting that the economy is on a glide path to a soft landing—inflation returning to the pre-pandemic pace while avoiding a recession. This soft-landing scenario implies that little or no further Fed tightening will be needed. Indeed, federal funds futures prices … Continue reading Obstacles to a Soft Landing
Time for the Fed to Pause?
The issue: The Fed has sent out signals that it is inclined to pause rate hikes at its upcoming June meeting after successive increases over the past ten FOMC meetings dating back to March 2022 (see chart below). The cumulative increase in the target for the federal funds rate has been 500 basis points (100 … Continue reading Time for the Fed to Pause?
Job Losses
The number of people filing for unemployment insurance has soared to 26 million over recent weeks—16 percent of our labor force. For some segments of the workforce—restaurant and hotel workers — it is much higher. Still, others have had their hours cut back. For all, this has greatly compounded the anguish of coping with the … Continue reading Job Losses
Today’s Crude Oil Glut
Have you heard that the price of a barrel of crude oil has fallen below $10? At the beginning of the year, it was $60. And it was not that long ago that it was above $100. Crazy! What does this mean? First off, it is telling us that supply has exceeded demand in a … Continue reading Today’s Crude Oil Glut
The Bible and Economics: Connecting the Two
Is the field of economics in a different sphere from the Bible? For a good part of my professional life, I treated them as such. I found the tools of economics to be extremely useful for addressing the policy problems through which I was working. And I marveled at how well a decentralized, market-based (capitalist) … Continue reading The Bible and Economics: Connecting the Two
Thomas D. Simpson, PH.D. 