Brynjolfsson Clashes With Former PIMCO Colleague McCulley Over Fed Policy

Published onAugust 1, 2014

Updated on May 13, 2021

Yesterday we explained why PIMCO chief economist Paul McCulley explained why he expects Federal Reserve Chair Janet Yellen to let the economy run with loose monetary policy until wage growth finally picks up, and today former PIMCO managing director and current Armored Wolf CIO John Brynjolfsson argues that she may not have much the luxury in the latest Armored Wolf investor letter, a copy of which was reviewed by ValueWalk.

“When inflation is too low, and unemployment is too high, it’s pretty easy to conclude policy (monetary, fiscal or other policies) should be easy,” writes Brynjolfsson. “Conversely, when inflation is above 2%, and unemployment is below NAIRU, it’s pretty clear monetary policy should be tighter than normal.”