Analysis of Current Economic Indicators and Fed's Dilemma

In this episode, Liz Ann Sonders and Kathy Jones analyze the March 2024 CPI data and its impact on the bond markets and Fed policy. CPI came in higher than expected, with significant increases in housing, clothing, and transportation services, probably closing the door on a June rate cut, as the Fed will likely have to be patient and wait for the numbers to improve. 

Then, Kathy interviews David Beckworth. They discuss the concept of nominal GDP targeting as an alternative approach to monetary policy. He explains that instead of targeting the price level or inflation, nominal GDP targeting focuses on stabilizing total dollar spending in the economy. Beckworth also discusses how nominal GDP targeting could have been used during the pandemic and its potential benefits for central banks. He highlights the importance of following nominal GDP and asset prices as indicators of the health of the macro economy.

Finally, Kathy and Liz Ann offer their outlook on the coming week's economic data.

David Beckworth is the host of the Macro Musings podcast and is a senior research fellow at the Mercatus Center at George Mason University as well as a former international economist at the U.S. Department of the Treasury.

On Investing is an original podcast from Charles Schwab. For more on the show, visit schwab.com/OnInvesting.

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