Last week, the Federal Reserve announced an increase in the Federal Funds rate to 1.25 percent. The last time the target rate reached so high was in September of 2008, when the rate was 2.0 percent. In October of that year, the target rate fell to 1.0 percent, and was moved down to 0.25 percent in December. It remained at 0.25 percent for the next 83 months. 

This week’s rate increase was the third increase since December 2016, when the Fed increased the rate from 0.5 percent to 0.75 percent. 

The Federal Reserve this week raised the Federal Funds Rate a quarter point to 1.25 percent, bringing the rate to the highest it’s been in eight years. One might now say monetary policy has progressed from a policy of “ultra low” rates to simply a policy of low rates.

How this will play out over time continues to depend quite a bit on how much the Fed shrinks its balance sheet and how soon a recession descends on the economy. 

“Is Government the Source of Monopoly?” asked Chicago economist Yale Brozen in an essay first published in 1968. Yes, he answered — not only directly, by awarding exclusive licenses and contracts, but also indirectly, via regulation, minimum-wage legislation, and other forms of government intervention.

Just two days ago the FOMC decided once again to raise the target range for the Fed Funds rate, with Yellen expressing optimism about 2% inflation and therefore (in the Keynesian framework), the economy itself. While Dallas Fed President Robert Kaplan voted with everyone else (except Neel Kashkari) to hike rates, he today made it clear that the inflation trend is worrying him. If the inflation rate continues to move away from 2%, his opinion is that rate hikes should be suspended. 

Two years ago, Bitcoin was considered a fringe technology for libertarians and computer geeks. Now, Bitcoin and other cryptocurrencies, such as Ethereum, are gaining mainstream adoption. However, mainstream adoption has been propelled by financial speculation instead of by demand for a privately minted and deflationary medium of exchange. After the Fed’s rate hike this week, Bitcoin and alternative cryptocurrencies, such as Ethereum and Dash dropped in value instantly. Bitcoin, for example, dropped by approximately 16% in value while other coins dropped by approximately 25%.

One of the few good things President Obama did was partially liberalize the US government’s policy toward Cuba. While it should have gone much further than it did, the Obama administration expanded the types of travel and trade allowed with Cubans in Cuba. 

In the wake of these moves, American entrepreneurs responded immediately with new air service, cargo service, and a myriad of other services designed to provide support to American travelers and business people. 

Terry McAuliffe’s Wednesday press conference on the Alexandria shooting offers an instructive lesson on what passes for quantitative analysis among politicians. 

Britain’s general election went horribly wrong, with the Conservatives forced into a putative coalition with the Democratic Ulster Party. Theresa May’s failure to secure a clear majority has provoked indignation, bitterness, and widespread pessimism. The purpose of this article is not to contribute to this outcry, but to take a more measured view of the situation faced by the British government with regards to Brexit, and the consequences for Europe.