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David Malpass argues that sustained fast economic growth in the U.S. will require comprehensive supply-side reforms to the Federal Reserve’s economic models. He states that this is necessary if lower interest rates across the yield curve are to be achieved.
Malpass points out that current Fed models consider rapid job growth inflationary, leading to expectations of high interest rates and weaker job growth. His comments emphasize the need for adjustments to official economic modeling to support a stronger growth outlook.