David Malpass

The Fed's models are entrenched.

So they actually have the idea of there being an output gap that if the economy is growing faster than it should, then you should raise rates.

They also have failed models on inflation.

So let's look at that.

If people's wages are going up, you're going to see it in the price of services.

That gets picked up in the Fed's models on inflation, and they hike the rates to squelch the wage hikes that are going up.

So it fights against exactly the outcomes that we're trying to get.

That's why it's called the demand side model.

And what I've advocated all along with all the people you mentioned is a supply side model that's built on defending the dollar and letting interest rates come down so that people can grow at the bottom end of the income curve.

We want the short rates down for small businesses, but we also want the long rates down for mortgages.

And that's not going to happen under their current models.

Yeah.

I think there's confusion in the economics community.

So people get tangled up.

And that's what I was writing about today.

I guess it'll be in the journal maybe tomorrow morning, but it's online now.

And people can find it by Googling Malpass WSJ.

And you see quite a bit of what I've written.

And I'm grateful to them for giving me space to talk about this.

The economics community is