Monetary policy shouldn’t overreact to one data point – IMF
Financial Stability Report highlights need for central banks to communicate steadiness
Central banks should clearly communicate the idea that monetary policy should not react excessively to any individual data point, the International Monetary Fund (IMF) has said.
The institution’s latest Financial Stability Report, published today (October 22), highlights August’s market turmoil as an example of how adverse surprises to the inflation or growth outlook can spur volatility in the financial markets.
The IMF says that although central banks should always be data-dependent, they need to
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