Discussion about this post

User's avatar
James E Keenan's avatar

Per Warren Mosler, "With higher income available to spend, bondholders can thus add to inflationary pressures by spending from those elevated cash flows."

While that's certainly a logical possibility, has Mosler (or anyone else) produced data demonstrating that bondholders do in fact increase spending when interest rates go up? If so, what is their marginal propensity to consume out of interest income?

Expand full comment
Brant Cooper's avatar

More conventional wisdom to be undone. Not sure why this one is so hard to crack, since Powell himself said rates won't affect the price of food or fuel. Who beyond old school economists and politicians buy into this? Wall St doesn't like rate hikes. Businesses don't like rate hikes. Yet here we are marching along to the said old tired story.

Brant

Expand full comment
8 more comments...

No posts