Fed’s new framework has had little impact on expectations – NBER paper
Early evidence suggests few people heard the announcement and fewer understood it
Early survey data on the impact of the Federal Reserve’s new average inflation-targeting (AIT) framework suggests few people understood the announcement, casting doubt on the central bank’s ability to shift inflation expectations.
In a working paper published by the National Bureau of Economic Research, Olivier Coibion, Yuriy Gorodnichenko, Edward Knotek and Raphael Schoenle use a daily survey of US households to study the effect of the policy’s announcement on August 27.
The authors note
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