Let’s Get Fiscal

(1) BeeGees, Olivia Newton-John, and Janet Yellen. (2) Counting words: “Fiscal” and “dollar” pop up often in FOMC minutes. (3) Trump may fill the wishes of Fed officials for more fiscal stimulus. (4) Fed officials hoping that fiscal policy can lift R*. (5) Mixed with confusion. (6) Dollar strength reflecting divergence between Fed and other major central banks. (7) Foreigners scrambling to repay dollar-denominated debts that financed carry trades. (8) Constructing an implied capital flows proxy for the world ex-US. (9) Our proxy explains strength of the dollar. (10) So does the drop in non-gold international reserves.