In Q3, American growth accelerated while core inflation decelerated. That deserves more attention.
I spoke with @dagenmcdowell on @FoxBusiness Big Money in the Morning about GDP and the federal debt. Real GDP growth rose from 2.2% to 3.4%, while core PCE inflation slowed from 3.3% to 2.5%, both at annualized quarterly rates.
Business investment and a resilient consumer are powering the economy. The AI buildout is creating foundations for greater productive capacity, and customers are already paying for computing power to analyze data, handle inquiries and write software. Consumers accounted for roughly three-quarters of Q3 growth: demand today alongside investment in tomorrow’s capacity.
With publicly held federal debt roughly the size of our annual economy, sustaining this growth matters. Rising incomes and profits expand the tax base and make the debt more manageable. France illustrates how much harder that becomes when heavy debt meets weak growth.
But growth cannot substitute for spending discipline. Congress should use this economic strength to slow spending growth and reduce borrowing, preserving our capacity to invest, defend the country and respond to future crises.
Treasury will spend $20T over the next decade to pay off national debt foxbusiness.com/video/64076547… #FoxBusiness
I spoke with @dagenmcdowell on @FoxBusiness Big Money in the Morning about GDP and the federal debt. Real GDP growth rose from 2.2% to 3.4%, while core PCE inflation slowed from 3.3% to 2.5%, both at annualized quarterly rates.
Business investment and a resilient consumer are powering the economy. The AI buildout is creating foundations for greater productive capacity, and customers are already paying for computing power to analyze data, handle inquiries and write software. Consumers accounted for roughly three-quarters of Q3 growth: demand today alongside investment in tomorrow’s capacity.
With publicly held federal debt roughly the size of our annual economy, sustaining this growth matters. Rising incomes and profits expand the tax base and make the debt more manageable. France illustrates how much harder that becomes when heavy debt meets weak growth.
But growth cannot substitute for spending discipline. Congress should use this economic strength to slow spending growth and reduce borrowing, preserving our capacity to invest, defend the country and respond to future crises.
Treasury will spend $20T over the next decade to pay off national debt foxbusiness.com/video/64076547… #FoxBusiness
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I really enjoyed joining @DavidBeckworth on Macro Musings to reflect on my time at Treasury and the questions shaping my work on financial stability and central bank independence.
Growth and financial stability aren’t opposing goals. Productive investment, rising incomes and stronger balance sheets make an economy better able to absorb shocks. Financial stability policy should account for those sources of resilience, alongside the risks it seeks to contain. FSOC’s comparative advantage is bringing regulators together to understand those risks and coordinate a response.
We also discussed my forthcoming book, Central Bank Independence 2.0. The question isn’t simply whether central banks should be independent. It’s: independent to do what? The strong case for insulating monetary policy from short-term political pressure doesn’t automatically extend to every function a modern central bank performs.
Thanks, David, for a thoughtful conversation.
Growth and financial stability aren’t opposing goals. Productive investment, rising incomes and stronger balance sheets make an economy better able to absorb shocks. Financial stability policy should account for those sources of resilience, alongside the risks it seeks to contain. FSOC’s comparative advantage is bringing regulators together to understand those risks and coordinate a response.
We also discussed my forthcoming book, Central Bank Independence 2.0. The question isn’t simply whether central banks should be independent. It’s: independent to do what? The strong case for insulating monetary policy from short-term political pressure doesn’t automatically extend to every function a modern central bank performs.
Thanks, David, for a thoughtful conversation.
New episode! Christina Skinner on the Financial Stability Oversight Council and Central Bank Independence
@CParaSkinner is a legal and financial scholar at the University of Pennsylvania, a former Bank of England official, and recently stepped down from her role as deputy assistant secretary in the FSOC office at the Treasury. Christina returns to the program to discuss her work with FSOC, the relationship between economic growth and financial stability, AI and financial regulation, central bank independence, the importance of democratic accountability, and much more.
youtu.be/_FGS3GApozE?si…
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The U.S. economy has tremendous underlying strength: markets are performing well, business investment is rising, and productivity growth is creating room for wages to rise without corresponding inflationary pressure.
Over the weekend, I discussed the prospects for durable, and how that strength translates into gains for American households—with @larry_kudlow on @FoxBusiness and on @NewsNation Live.
Expanding the economy’s productive capacity is the durable path to greater prosperity for the American people.
Over the weekend, I discussed the prospects for durable, and how that strength translates into gains for American households—with @larry_kudlow on @FoxBusiness and on @NewsNation Live.
Expanding the economy’s productive capacity is the durable path to greater prosperity for the American people.
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This morning I joined @Varneyco to discuss the Fed's rate decision.
Markets expect a 25bps hike. Do I think it is necessary to restore price stability? No. By some measures, inflation is moving in the right direction, and monetary policy remains somewhat restrictive. But a hike is understandable as a cautious, one-time recalibration—insurance against the risk that higher oil prices spread into broader inflation.
A single quarter-point hike is unlikely to derail this economy’s remarkable growth and resilience. A hiking cycle would be a different story: it would restrain growth, and the current data do not support that path.
President Trump is creating the conditions for lower borrowing costs over time. His administration’s pro-growth policies are designed to expand the economy’s productive capacity and will provide a durable path to lower inflation and sustainably lower rates.
So while today’s expected hike may not be necessary, it is defensible—provided it is a one-and-done recalibration, not the beginning of a new hiking cycle.
foxbusiness.com/video/64051487…
Markets expect a 25bps hike. Do I think it is necessary to restore price stability? No. By some measures, inflation is moving in the right direction, and monetary policy remains somewhat restrictive. But a hike is understandable as a cautious, one-time recalibration—insurance against the risk that higher oil prices spread into broader inflation.
A single quarter-point hike is unlikely to derail this economy’s remarkable growth and resilience. A hiking cycle would be a different story: it would restrain growth, and the current data do not support that path.
President Trump is creating the conditions for lower borrowing costs over time. His administration’s pro-growth policies are designed to expand the economy’s productive capacity and will provide a durable path to lower inflation and sustainably lower rates.
So while today’s expected hike may not be necessary, it is defensible—provided it is a one-and-done recalibration, not the beginning of a new hiking cycle.
foxbusiness.com/video/64051487…
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Christina Parajon Skinner retweeted
Congratulations to @federalreserve, @USOCC, and @FDICgov, on today’s Basel Capital Proposal.
Today’s outdated capital requirements are needlessly complex and misaligned with their actual objective. Rather than solving for safety and soundness, they are pushing lending out of the regulated banking system while simultaneously impeding economic growth.
The last Administration aimed to hijack the Basel modernization effort to reverse-engineer ever-higher capital requirements without rhyme or reason. Under President Trump’s leadership, we have taken a principled and calibrated approach that simplifies capital requirements and fosters a level playing field for banks of all sizes.
If finalized, this proposal would advance those goals, fostering economic growth through our regulatory regime.
Today is an important step in the regulatory reset our Administration is working towards, marking meaningful progress toward a financial system that builds Parallel Prosperity for Main Street and Wall Street.
Today’s outdated capital requirements are needlessly complex and misaligned with their actual objective. Rather than solving for safety and soundness, they are pushing lending out of the regulated banking system while simultaneously impeding economic growth.
The last Administration aimed to hijack the Basel modernization effort to reverse-engineer ever-higher capital requirements without rhyme or reason. Under President Trump’s leadership, we have taken a principled and calibrated approach that simplifies capital requirements and fosters a level playing field for banks of all sizes.
If finalized, this proposal would advance those goals, fostering economic growth through our regulatory regime.
Today is an important step in the regulatory reset our Administration is working towards, marking meaningful progress toward a financial system that builds Parallel Prosperity for Main Street and Wall Street.
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Christina Parajon Skinner retweeted
Our next Ripple Effect podcast series will break down key topics tied to elections:
🏛️ National Debt – @ProfJoaoGomes
🏛️ Immigration – @BrittaGlennon
🏛️ Tax Plans – @KentOnMoney
🏛️ The Fed – @CParaSkinner
🏛️ Branding – @AmReed2
Stay tuned on Tuesdays: whr.tn/rippleeffect
🏛️ National Debt – @ProfJoaoGomes
🏛️ Immigration – @BrittaGlennon
🏛️ Tax Plans – @KentOnMoney
🏛️ The Fed – @CParaSkinner
🏛️ Branding – @AmReed2
Stay tuned on Tuesdays: whr.tn/rippleeffect
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Christina Parajon Skinner retweeted
Applications are live for the one-day virtual #WhartonBizJourn on Thursday, April 11 featuring @Wharton Professors @Susan_Wachter, @CParaSkinner, David Musto and Michael Roberts.
Apply by April 3: whr.tn/4arwxXg
Apply by April 3: whr.tn/4arwxXg
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We are currently accepting papers for our April 5 FinReg conference. Details below. Please email or DM with questions!
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We will try to keep the audience on the edge of their seats.
Off to join @TheAALS @FedSoc panel to close the week on regulator independence w/@CParaSkinner @Jeremy_Kress and many more. Sparks should fly.
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Christina Parajon Skinner retweeted
#LiveNow: @RepAndyBarr convenes the Financial Institutions and Monetary Policy Subcommittee for a hearing entitled: "The Tangled Web of Global Governance: How the Biden Administration is Ceding Authority Over American Financial Regulation"
📺 Tune in 🔗
financialservices.house.gov/calendar/event…
📺 Tune in 🔗
financialservices.house.gov/calendar/event…
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This was a lot of fun to create; part of my ongoing work to explain how central banks work within constitutional democracy.
What role should the Federal Reserve play in the economy?
@Wharton's @CParaSkinner demystifies the Fed and explains its unique role in tracking both interest rates and unemployment to conclude our Ripple Effect podcast's series, "The Economy & You."
🎙️: whr.tn/45JQ2HO
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Some news on the CBDC front.
Our Governing Council has decided to move to the next phase of the digital euro project.
In November 2023 we will start laying the foundation for the possible issuance of a digital euro. A decision on issuing a digital euro will come at a later stage.
ecb.europa.eu/press/pr/date/…
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Christina Parajon Skinner retweeted
Coming up on 10/6: Two panels and two keynotes looking at how America can catch up on digital payments. W/ @vtg2, @ProfJulieHill, @DanAwrey, @AaronDKlein, @GiancarloMKTS, @CParaSkinner, @ChrisBrummerDr, and more.
Register -> brookings.edu/events/making-…
Register -> brookings.edu/events/making-…
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Christina Parajon Skinner retweeted
Coming up on 10/6: Two panels and two keynotes looking at how America can catch up on digital payments. W/ @vtg2, @ProfJulieHill, @DanAwrey, @AaronDKlein, @GiancarloMKTS, @CParaSkinner, @ChrisBrummerDr, and more.
Register -> brookings.edu/events/making-…
Register -> brookings.edu/events/making-…
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Christina Parajon Skinner retweeted
What should you know about today's economy? The next series of our Ripple Effect podcast features episodes on:
🎧 Real estate – @Key_Z_E
🎧 Economic modeling – @KentOnMoney
🎧 Signs of a recession – @NickRoussanov
🎧 The Fed – @CParaSkinner
Stay tuned: whr.tn/rippleeffect
🎧 Real estate – @Key_Z_E
🎧 Economic modeling – @KentOnMoney
🎧 Signs of a recession – @NickRoussanov
🎧 The Fed – @CParaSkinner
Stay tuned: whr.tn/rippleeffect
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Christina Parajon Skinner retweeted
Major payments event Oct 6 @BrookingsEcon @CornellLaw @vanderbiltlaw featuring @CFPB Chopra @federalreserve Waller @ProfYYadav1 @DanAwrey and many more. Sign up here:
brookings.edu/events/making-…
brookings.edu/events/making-…
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Christina Parajon Skinner retweeted
#LiveNow: @RepFrenchHill convenes the Digital Assets, Financial Technology and Inclusion Subcommittee for a hearing entitled: "Digital Dollar Dilemma: The Implications of a Central Bank Digital Currency and Private Sector Alternatives."
📺 Tune in 🔗
financialservices.house.gov/calendar/event…
📺 Tune in 🔗
financialservices.house.gov/calendar/event…
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