The God of price stability is dead

 In May, consumer inflation in the 19-member euro zone hit a record 8.1 per cent. That is not so good. In fact, that is très mauvais. Bringing this upward price pressure under control is now Christine Lagarde’s number one concern.

But it is not her only concern

Today’s central bankers fret about inflation. But they are also fretting about whether and why their economies are in equilibrium and whether and why their financial systems (and currencies) are sound.

The question is how aggressively monetary policy should intervene to dampen prices in the face of supply shocks, the duration of which are unknown. 

Edward Price FT 16 June 2022

https://www.ft.com/content/8c6481d5-4511-459e-af92-2d13277c8650

Is this how central banking was supposed to work? Probably not.

Here’s the truth. The 2006 asset bubble never burst: it was simply transferred from private to public ownership, from an assumption the Fed would bail the system out to the reality that it did. 

Edward Price 16 August 2021

https://www.ft.com/content/7ed490ed-2652-41f0-9aff-08aa0d3685a0