‘Inflation disagreement’ weakens US monetary policy – Fed study
Households’ inflation expectations differ from central bankers’, thus adding to post-Covid momentum
Disagreement among US households over inflation forecasting has contributed to a weakening of monetary policy, according to research from the Federal Reserve Board published on December 4.
Despite the Fed’s aggressive forward guidance that monetary policy would remain tight in response to high levels of post-pandemic inflation, consumer spending also remained high.
The authors of the research – Ding Dong, Zheng Liu, Pengfei Wang and Min Wei – use data from July 1991 to December 2023 to inform
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