Average inflation targeting raised post-Covid prices in US – study
Dallas Fed research argues Fait framework contributed to surging prices
Flexible average inflation targeting (Fait) contributed to the post-pandemic surge in US prices, according to researchers with the Federal Reserve Bank of Dallas.
Their working paper, published on April 7, says the Fed’s Fait framework raised expectations for headline, core, short- and medium-term inflation.
The authors, Roberto Duncan, Enrique Martínez García and Luke Miller, say their findings are robust, even when alternative drivers – such as pandemic-induced global supply bottlenecks and post
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