Trump Bull Run & the Taylor Rule for Stability & Prosperity. @larry_kudlow, CNBC, John Taylor, @hooverinst @economicsone



(Photo:Fed governors discuss long-term debt rule & swap margin rule at open Board meeting

Date 30 October 2015, 14:42 )

Twitter: @batchelorshow

Trump Bull Run & the Taylor Rule for Stability & Prosperity. @larry_kudlow, CNBC, John Taylor, @hooverinst @economicsone

"...In contrast, some of the people who’ve been discussed as appointees to the Fed are far more skeptical about using monetary policy to rev up the economy. The person most often named as Yellen’s possible successor is the conservative John Taylor, a professor at Stanford University and senior fellow at the Hoover Institution. He invented a rule of thumb for how central banks should steer rates based on the paths of inflation and output. The Taylor Rule caught on around the world in the 1990s and 2000s. But in a Nov. 23 blog post, he wrote that there’s been “a retrogression in parts of the central banking world in the past dozen years”—that is, a deviation from rules-based monetary policy. If Taylor or someone from his camp ran the Fed, the central bank might move quickly to extinguish any deficit-funded growth spurt that threatens to push inflation above the Fed’s 2 percent target. “Trump’s probably not going to like that,” says Paul Kupiec, a resident scholar at the American Enterprise Institute. “It wouldn’t be in President Trump’s best interest for the Fed to come in like gangbusters” in an effort to suppress inflation, says Timothy High, director of U.S. interest rates strategy at French bank BNP Paribas..."

Dec 14, 2016, 04:06 AM
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