What Scott Sumner thinks about interest rates
Monetary economist known for NGDP-level targeting; wrote TheMoneyIllusion.
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7 dated positions, 2010 to 2026, in their own words. Our reading of what Scott Sumner has said — not written or endorsed by them.
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Our readingThe real interest rate in the long run is determined by market forces, not by monetary policy.
Their wordsIn fact, the real interest rate is almost entirely determined by market forces in the long run, not by monetary policy.
↗Don't mix fiscal and monetary policyscottsumner.substack.com 2nd of 3 in this piece
- 4 years earlier
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Our reading · no longer heldThe Federal Reserve's average inflation targeting framework is a real commitment to hold inflation near a 2% average across the 2020s, so an overshoot now has to be offset by undershoots later.
No longer holdsI assumed they intended inflation to average roughly 2% during the 2020s.
SaidThe Fed refused to adopt average inflation targeting, and it made a serious policy error precisely because it failed to do average inflation targeting.
- 19 months earlier
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Their wordsThe Fed needs PCE inflation to average 1.96% for the remainder of the decade in order to hit their AIT target.
- 11 years earlier
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Our reading · no longer heldAggressive quantitative easing should raise long-term interest rates, because effective monetary stimulus raises them.
No longer holdsI predicted that aggressive QE would raise long term interest rates, a view which seemed to be refuted by the response on T-bond yields to the March 2009 Fed QE announcement.
SaidI predicted that aggressive QE would raise long term interest rates, a view which seemed to be refuted by the response on T-bond yields to the March 2009 Fed QE announcement.
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Our reading · no longer heldMonetary policy operates with long and variable lags, so attempts to fine-tune the economy make things worse.
No longer holdsIn the 1970s I thought monetary policy operated with long and variable lags, and thus fine-tuning would make things worse.
SaidIn the 1970s I thought monetary policy operated with long and variable lags, and thus fine-tuning would make things worse.
- 1 day earlier
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Their wordsAny effective monetary stimulus would be expected to raise long term rates.
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Their wordsIn the 1970s I thought monetary policy operated with long and variable lags, and thus fine-tuning would make things worse.