The article argues that the Federal Reserve's recent rate hike decision, while justifiable on inflation grounds, highlights a critical lack of an underlying, transparent policy framework. The core problem is that the Fed's decisions appear discretionary, leading to market uncertainty because the committee's judgment, rather than clear data, dictates policy shifts. The author proposes that the Fed adopt a formal monetary policy rule—an algebraic formula linking the target rate to indicators like inflation and unemployment—to replace subjective guidance. Implementing such a rule would provide market predictability, enhance transparency, and shield the Fed from political attacks by making deviations from the standard easily quantifiable.
Why Iran’s disruption of the Strait of Hormuz matters
English Summary
Iran's closure of the Strait of Hormuz disrupts 20% of global oil and LNG supplies, effectively blocking maritime traffic to near-zero levels. Despite ongoing U.S. military campaigns, Iran maintains defiance with 5,000-6,000 mines and asymmetric naval capabilities, making military escorts prohibitively risky and potentially counterproductive to market confidence. Strategic petroleum reserve releases will only offset 7% of the 15-17% supply loss, while sustained market recovery requires the broader military conflict to end—a timeline neither the U.S. nor Iran controls.
中文摘要
伊朗關閉荷莫茲海峽，導致全球石油及液化天然氣供應中斷20%，實際上已將海上交通阻斷至接近零的水準。儘管美國持續進行軍事行動，伊朗仍憑藉5,000至6,000枚地雷及非對稱海軍能力保持對抗態度，使軍事護航存在高度風險，且可能對市場信心造成反效果。戰略石油儲備釋放僅能彌補供應損失的7%（供應損失幅度為15-17%），而要實現市場持續復甦，需要更廣泛的軍事衝突結束——這是美國和伊朗都無法控制的時間表。
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