The Perfect Lecture

I am currently teaching monetary policy, and my class is rolling right now. Yesterday’s lecture was one of those rare moments where everything clicked: the pacing, the clarity, students’ questions, the energy in the room. It felt smooth. At the end, the students gave a round of applause. That doesn’t happen often, but a feeling every professor chases. Similar to how pitchers chase a perfect game in baseball.

The lecture focused on the psychology and pain of recessions, how downturns are experienced not just in data, but in real lives, and why monetary policy exists in part to stabilize those moments. We talked about how central banks attempt to soften the blow, to reduce the depth and duration of economic pain.

But what really brought the lecture to life were the stories.

My Economic Story

I shared my experience during the housing boom from 2003 to 2006, when I worked in the mortgage industry. I was only slightly older than my students are now, and that experience shaped the trajectory of my career. They leaned in as I described the environment, how easy credit was, how quickly markets were moving, and how confidence often outpaced caution. They are drawn to those moments of irrational exuberance because they make economics feel real, tangible, and human. They see some of those elements in their current economy, and they start to connect the dots.

At one point, a student reminded me that they were not even born during that period.

I felt old, but we kept going.

We moved back to the dot-com boom and bust of the late 1990s, and then further to the Great Inflation of 1974–1980. I made it clear that I was not around for that period either, but that is precisely why we study them. Economic history is not just a record of the past; it is a guide to understanding the present. These patterns have a way of reappearing, often in new forms, but with familiar underlying dynamics.

Changing How We Teach

Alongside teaching, I have been working on a new project with Dr. Usamah Al Farhan that is reshaping how we approach macroeconomics in the classroom.

One of the changes is that we removed the traditional final exam and replaced it with a research paper and a data analysis project. Instead of studying to perform on a test, students are now required to engage deeply with a question, work through data, and communicate their findings.

I have seen a noticeable shift in the classroom.

Students are asking better questions. They are more engaged in discussions. They are taking ownership of the material in a way that is difficult to achieve through traditional assessments. The quality of their thinking has improved because the expectation has changed. They are no longer preparing to recall information; they are learning to apply it.

I will share more as we continue developing this work and move toward publication, but the early takeaway is clear: when you ask students to think at a higher level, they respond.

The Dual Mandate Check

As the Federal Reserve evaluates current economic conditions, it continues to balance its dual mandate: maximum employment and stable prices. A look at recent data reveals a complex, somewhat conflicting picture, and expectations of increasing inflation add to the complexity of policy.

Labor Market: Strong but Uncertain

The labor market appears resilient on the surface, but the underlying data has become increasingly difficult to interpret. Recent reports have been volatile, and significant revisions are making it challenging to identify a clear trend.

In March 2026, nonfarm payrolls increased by 178,000, exceeding expectations that ranged between 59,000 and 65,000. The unemployment rate edged down to 4.3%. This followed a revised decline of 133,000 jobs in February. March job gains were concentrated in sectors such as healthcare, construction, and transportation, while labor force participation declined.

Taken together, the labor market appears to be holding, but the signal is noisy. For policymakers, this uncertainty complicates decision-making.

Inflation: Moving Higher?

On the other hand, the inflation data will be released today at 830am.

Here is what economists are expecting.

Year-over-year headline inflation to rise to 3.4%, up from 2.4% in the previous month. On a month-over-month basis, inflation will increase by 0.9%, compared to 0.3% in February. Core inflation, which excludes food and energy, is expected to move higher, with year-over-year growth at 2.7% and monthly growth at 0.3%.

If true, these increases move inflation further away from the Federal Reserve’s 2% target and suggest that price pressures remain persistent.

The Fed’s Dilemma

The Federal Reserve now faces a familiar but difficult tradeoff.

Policymakers have indicated that they may look through some of the recent inflation, particularly if it is driven by temporary factors such as an oil shock. However, this approach becomes harder to justify in an environment where inflation has remained above target for an extended period.

When “Temporary” Becomes Behavioral

Inflation has exceeded the Fed’s 2% target for five years. At some point, what is considered temporary begins to look persistent. As that distinction fades, so does the Fed’s ability to rely on patience as a policy strategy. Will higher inflation expectations get ingrained in our decisions, making it difficult to bring it down in the future?

Bottom Line

Yesterday’s lecture was a reminder that economics is more than models and policy frameworks. It is a study of behavior, incentives, and recurring patterns.

The stories we tell about past economic events are not just educational tools; they are essential for understanding the present. The housing bubble, the dot-com boom, and the Great Inflation each offer lessons that remain relevant today.

We are once again in a moment defined by uncertainty. The labor market is difficult to read. Inflation is trending upward. The war on Iran is causing government spending to increase. The Federal Reserve is navigating a narrow path between competing risks.

This is where economics and history intersect. The data tells us what is happening. History helps us understand what it means.

Studying economics has made me appreciate history in a deeper way, not as a record of what happened, but as a tool for thinking about what comes next.

Have we been in a similar position before? What does it tell us about what might happen next?