Category: Inflation, Think Tank

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

3 Responses to “Central Bank Transparency Anchors Inflation Expectations”

  1. RW says:

    A clear correlation may not be such a good thing if the anchor rope is wrapped around the economy’s ankle.

    Policy Induced Mediocrity?

    Why did the Federal Reserve lean against their optimistic 2014 forecast? It seems that monetary policy over the past year can be summarized as a missed opportunity to supercharge the recovery, thereby locking the US economy into a suboptimal growth path.

    NB: In this they would only be following the past several years of Beltway ‘leadership,’ confirming Keynes observation that what often passes for wisdom essentially argues that it is better for reputation to fail conventionally than to succeed unconventionally, but it’s a shame none-the-less.

  2. ch says:

    Transparency has little to do with it. It has everything to do with how you define inflation Since the Fed embarked on these policies, energy, food, Rx and healthcare prices have risen meaningfully. They are not counted for inflation, and since in fact people cannot live without these things, the rising costs of these items against a flat consumer income means reported CPI stays tame.

    • Frilton Miedman says:

      I agree.
      Those who make above median, namely policy-makers and regulators, aren’t likely to note the increase of low end staples, energy or food.

      When I was younger and money was tight, there was always cheap food like pasta (or Ramen noodles) that I could fall back on….the college kid diet.

      The price for a 1lb box of pasta has gone from $0.50 a box to $1.00 in the last 10 years, and pasta is still one of the cheapest food staples.

      This sounds trivial, until you figure what that means to an average family with median wage being down since 2007 and total % of employed population also down substantially.

      While I know these costs are weather driven, according to crop yields, I also suspect the advent of the CFMA has artificially altered traditional inflation metrics, as evidenced when oil soared to $145/barrel in 2008 while demand was down, supply was up.

      I don’t think CB’s pay enough attention to these variables, if at all, instead they focus on an excessively broad array of prices and assume it’s representative of the whole, if so, attempting to push inflation could reap a horrific result.