OUT OF OPTIONS:
Navigating an Era of Fiscal Dominance, Rate
Cuts, and Debt Monetization
The Ghost of Arthur Burns
U.S. Federal Reserve Chair Jerome Powell, deeply mindful of Arthur Burns’ missteps and inspired by Paul Volcker’s tenacity, is fully cognisant of the historical significance of his role. I have consistently argued that Powell would benefit from studying William McChesney Martin’s tenure as the first post-Second World War Federal Reserve Chair in the 1950s. Martin adeptly navigated through a period of fiscal dominance, a pattern that is emerging once again. As Sir Winston Churchill implied,1 focusing on the wrong historical period can lead to policy errors and financial turmoil.
Download full article here:
