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.
Don’t Let the USMCA Drift Away
English Summary
The primary finding is that the greatest threat to North American competitiveness is not the withdrawal of USMCA, but the economic uncertainty caused by its protracted review process. The agreement is crucial because it underpins a deeply integrated 'coproduction' system where supply chains run across U.S., Mexican, and Canadian borders. Policy efforts must prioritize an early extension of the pact to prevent investment chilling and maintain predictable preferential trade access, especially as rivals like China expand their manufacturing reach. Failing to address this uncertainty risks slow economic erosion, forfeiting North America’s strongest structural advantage.
中文摘要
主要發現指出，對北美競爭力最大的威脅並非美墨加協定（USMCA）的退出，而是其曠日費時審查過程所引發的經濟不確定性。該協定至關重要，因為它支撐著一個橫跨美國、墨西哥和加拿大邊界的高度整合「共生產」體系。政策制定者必須將優先重點放在及早延長該協定上，以防止投資降溫並維持可預測的優惠貿易便利化，特別是當中國等競爭對手擴大其製造能力時。若未能解決這種不確定性，不僅會導致緩慢的經濟侵蝕，更可能使北美最堅實的結構優勢付諸泡影。
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