Greg Ip

Political leaders around the world are being tossed out by voters unhappy with rising prices.

But Chairman Jerome Powell didn’t explain how the so-called terminal rate will be determined, leaving open the risk the central bank will overdo its tightening cycle.

An economic theory gaining attention among Republicans argues that monetary and fiscal policy are ultimately inextricable. If fiscal policy is irresponsible, even a responsible central bank can’t control inflation.

Microeconomic analysis suggests underlying inflation could be as low as 3%; macroeconomic analysis suggests it isn’t.

China’s leader has made his country’s challenge to the West clearer but its economic prospects darker.

Like in previous financial booms, investors’ belief that low rates would last forever fueled leveraged strategies that are now coming undone, driving rates up.

The former Federal Reserve chairman and two other academics developed the theoretical foundations for why banks exist and why bank panics hurt.

Under Jerome Powell’s leadership, the central bank doesn’t conform to any consistent formulas that economists have long used to explain its decisions.

Britain’s proposed income-tax cut shows political leaders are still stuck in a prepandemic world of limitless borrowing.

This time, markets understood quite clearly what the Federal Reserve meant: Inflation is too high and it will likely take a recession to get it down.