In North America, the problem faced by central bankers beginning in 2021 was unprecedented. How could the Fed and the Bank of Canada engineer a disinflation in a regime with inflation targeting, with an overnight nominal interest rate as an intermediate target? It’s been a struggle, but things have gone surprisingly well. Unfortunately, central bank officials seem at a loss as to how to close the deal.
Do Central Bankers Know What They're Doing?
Do Central Bankers Know What They're Doing?
Do Central Bankers Know What They're Doing?
In North America, the problem faced by central bankers beginning in 2021 was unprecedented. How could the Fed and the Bank of Canada engineer a disinflation in a regime with inflation targeting, with an overnight nominal interest rate as an intermediate target? It’s been a struggle, but things have gone surprisingly well. Unfortunately, central bank officials seem at a loss as to how to close the deal.