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.
The Iran War Is an Expectations Game
English Summary
The article argues that the conflict between the US and Iran is stalled in an "expectations game," where both parties are unable to negotiate a lasting peace because they have already declared total victory. This mutual overconfidence prevents genuine de-escalation, despite cease-fire agreements and diplomatic efforts. For a resolution to occur, policy must shift focus from military or diplomatic breakthroughs to managing the inflated expectations and political claims of victory held by both sides. Successfully navigating this requires finding a mutually acceptable off-ramp that does not undermine either party's narrative of success.
中文摘要
本文論述，美國與伊朗之間的衝突陷入了一場「期望博弈」（expectations game）。雙方皆因已宣告全面勝利，導致無法協商出持久和平。這種相互的過度自信，使得局勢難以真正緩和，儘管存在停火協定和外交努力。若要達成解決，政策必須將焦點從追求軍事或外交上的突破，轉移到管理雙方所抱持的膨脹期望和政治勝利主張上。成功應對此局，需要找到一個雙方都能接受的退出機制，且不會動搖任一方的成功敘事。
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