What is the main question in American monetary policy today?

It is not “given that U.S. inflation is so low, how can anyone sane oppose further monetary expansion?”

It is instead a blurred mix of “is Hélène Rey right about the global reach of the Fed?“, “would further U.S. monetary expansion make that global reach better or worse?”, “are the rate hike fears in the corporate bond market a reason to continue or postpone rate hikes?“, and “how strong will the dollar get, and how much of a problem will that be, if the U.S. and EU continue to diverge in their recoveries and monetary policies?“.

If you consider those issues, all of a sudden we have a fruitful debate, and I would say a debate with few clear answers.

The ECB, I agree, should simply be pushing for a looser monetary policy.  How can anyone sane oppose monetary expansion there?

My apologies that many of those above links are FT or NYT-gated, but those are often the best sources…


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