Fed policy roundtable II: recession risk and sticky inflation
Academics look at forward guidance, asset purchases, and the “magic” in forecasting models
This is the second part of Central Banking’s roundtable discussion with several economists about the challenges facing the US Federal Reserve. You can find the first part of the discussion here.
How do you characterise the risks of both major recession and persistent inflation?
Takatoshi Ito: It all depends on the balance between the inflation-targeting mandates and the other part of the dual mandate. I think so far that inflation targeting’s effect on inflation expectations is still there
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