Breitbart Business Digest: Warsh’s Supply-Side Case for Cutting Rates

The Unorthodox Case for Cutting Rates Now

The easiest argument against rate cuts is also the most conventional one: inflation is high and has been rising, unemployment is low, payrolls are still growing, consumer spending has been resilient to the gas-price shock, and markets have all but abandoned the idea that the Federal Reserve will ease this year.

That is the standard monetary policy playbook. It says the Fed cuts when the economy is weak and tightens, or at least refuses to cut, when inflation is high.

Kevin Warsh, who was confirmed as Fed chairman last week and will be sworn in soon, may have a different playbook available to him.

Monetary Policy Is Not Just About Demand Anymore

The incoming Fed chair has already suggested that artificial intelligence and productivity gains could change the inflation outlook. That argument can sound like a political talking point if stated