Don’t dismiss inflation risks but don’t overreact, say central bankers
Sbordone, Smets and Vlieghe weigh up challenges for central banks in the “return towards normal”
Monetary policymakers must strike a fine balance between “dismissing” inflation risks and “overdoing” the response, central bankers said on May 17.
The New York Fed’s Argia Sbordone made the comments in a panel discussion on the next steps for monetary policy. The vice-president said the Fed should be “vigilant” but should also “try not to react too much” to what is likely to be volatile data. “The important thing is to maintain communication with the public,” she added.
Jan Vlieghe, a
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