Most of all he thinks that interest rates should have been raised by now-just because.
Republican Sen. Pat Toomey said Thursday it's "unbelievable" that interest rates remain so low and it's time to end the Federal Reserve's "subjective" moving of the goal post.
"The Fed no longer has credibility, and you can see that. The divergence between the futures markets and the Fed's own projections about what they're going to do about interest rates—this is a huge problem," he told CNBC's "Squawk Box."
http://www.cnbc.com/2015/07/16/fed-has-lost-credibility-senator-toomey.html
Right. If interest rates are still low after 7 years then this must mean the Fed is subjective in his opinion. Of course, the view that 7 years just seems too long for interest rates to be low is not at all subjective.
He wants-what else?-a rigid rule for the Fed to follow.
"Toomey is a member of the Senate banking committee, which will hear testimony from Fed Chair Janet Yellen on Thursday. He has called on the central bank to adopt a rule that would lay out how it will set monetary policy. Under such a rule, the Fed would have to explain itself to Congress were it to deviate from its plan."
Well there's something no one has ever thought of before. I guess he's never heard of John Taylor before.
Clearly his vague feeling that 7 years is too long is the basis of a rigorous rule. Here, though, he's just not showing any imagination:
"I've never been wild about the idea of giving Congress control over monetary policy, but after seeing what this Fed has been doing for these many years now, I'm not so sure it would be any worse," the Pennsylvania Republican said.
He's clearly assuming that the Democrats will never get into Congress again. Because it's pretty clear what his preferences are:
1. For the GOP Congress to set monetary policy.
2. For the Fed to set it.
3. For aliens to attack and destroy the earth
4. It be conclusively determined there is no God.
5. A Democrat c Congress sets monetary policy.
He ought to be careful of what he wishes for.
Sumner, of course, argues that we are now in a period-Tyler Cowen's Great Stagnation-where we are going to have low interest rates for the foreseeable future.
We can debate whether we want a rule but we already have one though Toomey seems not to know. The real question for Janet Yellen is why with inflation beneath the 2% inflation target, the Fed isn't taking steps to raise it.
Republican Sen. Pat Toomey said Thursday it's "unbelievable" that interest rates remain so low and it's time to end the Federal Reserve's "subjective" moving of the goal post.
"The Fed no longer has credibility, and you can see that. The divergence between the futures markets and the Fed's own projections about what they're going to do about interest rates—this is a huge problem," he told CNBC's "Squawk Box."
http://www.cnbc.com/2015/07/16/fed-has-lost-credibility-senator-toomey.html
Right. If interest rates are still low after 7 years then this must mean the Fed is subjective in his opinion. Of course, the view that 7 years just seems too long for interest rates to be low is not at all subjective.
He wants-what else?-a rigid rule for the Fed to follow.
"Toomey is a member of the Senate banking committee, which will hear testimony from Fed Chair Janet Yellen on Thursday. He has called on the central bank to adopt a rule that would lay out how it will set monetary policy. Under such a rule, the Fed would have to explain itself to Congress were it to deviate from its plan."
Well there's something no one has ever thought of before. I guess he's never heard of John Taylor before.
Clearly his vague feeling that 7 years is too long is the basis of a rigorous rule. Here, though, he's just not showing any imagination:
"I've never been wild about the idea of giving Congress control over monetary policy, but after seeing what this Fed has been doing for these many years now, I'm not so sure it would be any worse," the Pennsylvania Republican said.
He's clearly assuming that the Democrats will never get into Congress again. Because it's pretty clear what his preferences are:
1. For the GOP Congress to set monetary policy.
2. For the Fed to set it.
3. For aliens to attack and destroy the earth
4. It be conclusively determined there is no God.
5. A Democrat c Congress sets monetary policy.
He ought to be careful of what he wishes for.
Sumner, of course, argues that we are now in a period-Tyler Cowen's Great Stagnation-where we are going to have low interest rates for the foreseeable future.
We can debate whether we want a rule but we already have one though Toomey seems not to know. The real question for Janet Yellen is why with inflation beneath the 2% inflation target, the Fed isn't taking steps to raise it.
I asked Sumner what he thought about Toomey's statement. No response yet.
ReplyDeleteI was wondering the same thing. He probably won't want to be too critical as Toomy is a Republican and he figures being very critical would please liberals.
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ReplyDeleteOk it's worse than I thought. Because you HTed me he's definitely not going to want to say too much. LOL
ReplyDeleteI know he HTed me recently himself but still I suspect he doesn't want me to encourage me too much
Notice, however, that TallDave (whom I think is Republican, or at least conservative) responded and confirmed that right wingers are sometimes pretty ignorant regarding monetary policy.
DeleteActually that is pretty impressive as TallDave have had some bad moments-I even wrote a post about him once and it wasn't complimentary to say the least.
DeleteLater he even discovered it and left me a comment that my blog is a waste of time and he won''t be visiting again. That's a pretty typical encounter for me and conservatives. LOL
Well no matter what I appreciate the effort Tom! I''m never going to protest being quoted or linked.
ReplyDelete