● Finishing the Inflation Job and New Challenges for Monetary Policy
Michael D. Bordo (editor), et al.
Summary via publisher (Hoover Institution Press)
How should the Fed finish the inflation-reduction job and prepare for the changing world ahead? And exactly how did one of Hoover’s most influential living economists assist scholars in thinking about where we go from here? Finishing the Inflation Job and New Challenges for Monetary Policy collects essays and discussions from the annual Hoover Institution Monetary Policy Conference, held on May 9, 2025, exploring these themes and considering other big-picture issues that affect monetary policy in this volatile international environment. Each year, the conference brings together academics, policymakers, media members, and others to consider the issues affecting monetary policy, both in the United States and worldwide. In the chapter sharing her welcoming remarks to the conference, Hoover Director Condoleezza Rice sets the tone, stating that the United States is “experiencing an avalanche of uncertainty,” with everything about the international order in question, including the United States’ role in it.
Major Asset Classes | April 2026 | Performance Review
Markets rebounded in April following the selloff in March. In some cases, you have to squint to see a recovery, but April’s gains were broad, lifting all the major asset classes to some degree, based on results for a set of ETFs.
Inflation Alarms Starting To Ring in the Bond Market
The bond market is losing faith that inflation risk from the Middle East conflict will be contained and fade quickly. The Federal Reserve’s monetary policy is still in wait‑and‑see mode, but several key Treasury yields aren’t waiting to see what happens.
Middle East Turmoil Fuels Inflation Fears, Testing Fed’s Patience
The Federal Reserve is expected to keep its target interest rate unchanged in today’s policy announcement, but the stable outlook belies the unsettled inflation picture that’s keeping the bond market on edge.
A Perfect Storm Awaits Warsh At The Fed
Winning Senate approval may be the easy part.
The path has been cleared for Kevin Warsh to become the next chairman of the Federal Reserve in mid-May, when Jerome Powell’s term ends. Sen. Thom Tillis cancelled his obstruction to Warsh after the Department of Justice closed its criminal investigation of Powell, clearing the way for approval. The Senate Banking Committee has scheduled a vote on Warsh for tomorrow, and a greenlight is likely, which would allow the nomination to proceed to the full Senate. At that point, the real challenge begins. Continue reading
Q1 GDP Set to Rebound, But Gulf War Stalemate Clouds Outlook
Economic activity appears set to recover in this week’s initial estimate of first‑quarter GDP, based on the median nowcast from several estimates compiled by CapitalSpectator.com. But any celebration will be muted as the stalemate in the war between the US and Iran lingers, casting a shadow over the inflation and growth outlook for Q2 and beyond.
Book Bits: 25 April 2026
● Prophecy: Prediction, Power, and the Fight for the Future, from Ancient Oracles to AI
Carissa Véliz
Review via The Wall Street Journal
Oil and gas prices have been so erratic lately that the time-honored roller-coaster metaphor now looks sedate. Yet none of the price shifts have been in response to actual supply. Instead, the market has been making bets on what it thinks the consequences of the Middle East war will be.
Traders rely on prediction in the most unpredictable of circumstances. Energy markets are far from unique, as Carissa Véliz, a professor at Oxford University’s Institute for Ethics in AI, shows in “Prophecy.” Her sweeping account of prediction across history demonstrates why we would do well to approach most forecasts with the skepticism we now show to prophets.
Research Review | 24 April 2026 | Prediction Markets
Who Wins and Who Loses In Prediction Markets? Evidence from Polymarket
Pat Akey (ESSEC Business School), et al.
April 2026
We study pricing efficiency in decentralized prediction markets by comparing marketimplied probabilities from Polymarket with benchmarks derived from option-implied riskneutral distributions extracted from the derivatives market. We study Bitcoin and Ethereum prediction bets and find that, although Polymarket prices broadly track option-implied benchmarks, they show systematic price differences driven by behavioral factors and market frictions. Price differences are most pronounced in tail events, during periods of high volatility, and in response to major macroeconomic shocks, and they reflect the influence of sentiment, attention, and blockchain-specific risks. These results reveal both efficiency and behavioral distortions in prediction markets.
Global Energy Shock Sends Stock Markets on Divergent Paths
The Iran conflict has triggered “the biggest energy security threat in history,” according to Fatih Birol, head of the International Energy Agency (IEA), speaking on CNBC yesterday. Yet the impact will not be felt uniformly, a disparity that likely plays a role in the varied responses in global stock markets to date.
March Retail Surge Hides Warning Signs for Consumers
US retail sales rose in March, beating expectations and posting the strongest increase in more than three years, but a significant portion of the spending was driven by gasoline sales—an effect of the spike in energy costs due to the Iran war. The results raise a warning flag for the consumer sector at a time when a return to pre‑war energy costs appears unlikely in the near term.