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Economists Cry Foul: Growing Chorus Says Fed Policy Too Tight
The Fed's overstaying its welcome at terminal.
That's the message from a growing number of business economists polled for the latest vintage of the NABE's Economic Policy Survey, which tallied responses from 184 NABE members. This is a semi-annual poll and it was administered late last month.
Although inflation remains well above the Fed's (arbitrary) definition of price stability, markets and macro watchers are increasingly keen to cite three-and six-month annualized figures in contending tha
It seems that sky rocketing housing prices have led Gen Z/Millenials to suspend the dream of buying a home. Therefore, they have been spending (entertainment, travel and shopping, etc.) instead of saving for a down payment.
If housing prices/mortgage rates drop (resulting in more existing home owners willing to sell because their existing mortgage rate is not as favorable to market rates) it will be interesting to see if the Gen Z/Millenial group stop spending on entertainment, travel and shopping (which would negatively impact the economy) in order to start saving for a down payment.
GenZ (and Millenials) are the children of baby boomers who will, as every generation does, pass away in larger numbers in the next 10 years.
Inheritances will provide housing and fuel spending (in the least meritocratic way possible).
Boomers may die but at least half won’t have much to pass on if the wealth data is any indication.
“but that’s economists for you”
is great humor, could have been the title of the piece!
I wonder if surveying a subset of economists who actually work inside trading houses would be more useful since when they get macro wrong there’s real money lost?
Surely Powell (who missed the inflation start/spike) knows they have plenty of tools (SVB-style) to fix a “hard landing” but precious few to solve inflation (“make deflationary technology or globalization widespread”?)
Right now the data says the economy’s healthy (until it isn’t 😉