Here's a new Wall Street Journal commentary piece by By Charles I. Plosser and Mickey D. Levy: President Trump’s threat to nominate a new Federal Reserve chairman who will lower interest rates is misguided. History suggests that the economy and financial markets perform best when the Fed prioritizes price stability, and performance suffers when other goals take precedence. A central bank operating independently generates the best outcomes.

Here's a presentation on tariffs I made with my colleague Michael Bordo at a Hoover Institution Economic Policy Workshop. Mike describes how Trump's tariffs policy ignores the important lessons of history that tariffs are costly mistakes. In the second half of the presentation, I describe the likely adverse impacts of tariffs on the economy, financial markets and the Fed, with a focus on the potential high costs of a loss of U.S. government credibility and reliability. I conclude with a scenario analysis of Trump's tariff policies and speculate on probable outcomes.

This is a paper Mickey Levy co-authored with Michael Bordo that was published by the Hoover Institution in its Defining Ideas series. We describe the analytical flaws and misperceptions underlying Trump's preference for tariffs, discuss their expected effects, and express concerns that Trump's next move may be to pressure the Fed to lower rates or maybe manage the US dollar through Treasury-Fed currency intervention. Both activities would be dangerous, and we urge members of Congress on both sides of the political aisle to support the independence of the Fed.

In this new Hoover Institution Defining Ideas article, I assess possible impacts of deregulation, lower tax rates, and tariffs. Drawing on the history of Trump’s first term, an evenhanded assessment of the four pillars of Trump’s current economic platform — higher tariffs and tough anti-China policies; extending the 2017 tax cuts; deregulation and increasing government efficiency; and deporting immigrants — suggests that there will be offsetting pluses and minuses. The net economic impacts are most likely somewhere in between the most pessimistic prognostications and the rosy scenario envisioned by the Trump team. There are many key uncertainties and risks.

Wall Street Journal Commentary by Mickey D. Levy: The economic platforms of both presidential candidates are littered with antigrowth proposals.The Biden platform, on which Kamala Harris will presumably run, is a pumped-up version of typical Democratic policies. It features significant increases in taxes and spending.Donald Trump is proposing to hold the line on spending and current tax policy but would raise tariffs and pursue an economically destructive immigration policy. The resilience and resourcefulness of the U.S. private sector is remarkable, but why test it with these wrongheaded proposals?

At the conclusion of its FOMC meeting this Wednesday, the Fed will release its quarterly Summary of Economic Projections (SEPs). In this podcast episode of Central Bank Central, Kathleen Hays and I discussed expected changes in the Fed's projections, the history of the SEPs, and common misperceptions. Based on a recent paper co-authored with Charles Plosser, former President of the Federal Reserve Bank of Philadelphia, and presented to the Hoover Monetary Policy Conference ("The Fed's Strategic Approach to Monetary Policy Needs a Reboot", May 2-3, 2024) and last week's related Wall Street Journal Commentary ("What the Fed Doesn't Communicate, June 6, 2024), I provide suggestions for how the Fed should modify and improve the SEPs.