Strict inflation targets for central banks have caused economic harm

A great experiment in monetary policy is drawing to a close.

Never before, over the course of some 5,000 years of lending, have interest rates sunk so low.

The trouble is that whenever an institution is guided by a specific target, critical judgment tends to be suspended. 

Now, inflation is back and central banks are scrambling to regain control without crashing the economy or inducing yet another financial crisis.

Elected politicians cannot continue to shirk responsibility. They need to reconsider central banks’ mandates, taking into account the impact of monetary policy not just on near-term inflation, but on asset valuations (especially real estate), leverage, financial stability and investment.

Edward Chancellor FT 25 July 2022

https://www.ft.com/content/7dfed876-f73e-42b0-acb8-088f20a4e550

Edward Chancellor, The Price of Time: The Real Story of Interest

John Mauldin 2 July 2022

https://englundmacro.blogspot.com/2022/07/edward-chancellor-price-of-time-real.html