Nice article. it seems to me that the problem policymakers' are facing is a lack of a clear understanding on how inflation and economic activities are shaping in this post-pandemic environment.
I think the big issue at the Fed is this lack of clear understanding has meant that they have pushed the data dependency dial up which I think is definitely the wrong approach (data are noisy).
Unsure if we've spoken about this before but I like the BoE's cases approach because at least they acknowledge where the fundamental uncertainty is (post pandemic supply side changes especially in the labour market) and it premises their analysis
Nice article. it seems to me that the problem policymakers' are facing is a lack of a clear understanding on how inflation and economic activities are shaping in this post-pandemic environment.
Thanks! And I agree completely
I think the big issue at the Fed is this lack of clear understanding has meant that they have pushed the data dependency dial up which I think is definitely the wrong approach (data are noisy).
Unsure if we've spoken about this before but I like the BoE's cases approach because at least they acknowledge where the fundamental uncertainty is (post pandemic supply side changes especially in the labour market) and it premises their analysis
Yes, I agree: it is more transparent regarding what they are focusing on and in setting the narrative.
100% - anchoring expectations is a good thing!