Central banks and inflation - eroded their credibility in the eyes of investors and society at large

Central banks’ independence is harder to justify after such a failure of “analysis, forecasts, action and communication,” Allianz SE’s chief economic adviser, Mohamed El-Erian, tweeted in October. 

The tragic result, he says, is “the most front-loaded interest­-rate cycle that we have seen in a very long time

When reckless lending eventually blew up the housing and credit markets in 2008, then-chair Ben Bernanke deployed the Fed’s balance sheet in ways that hadn’t been seen since the Great Depression.

Their coordinated response in March 2020 put a floor under asset prices and kept bond yields low, helping governments fund the massive spending needed to support millions of ­unemployed people.

While central banks in most modern economies enjoy day-to-day independence, their mandates are set by democratically elected governments. 

Bloomberg 20 November 2022

https://www.bloomberg.com/news/features/2022-11-20/inflation-has-humbled-central-bankers-here-s-how-they-can-regain-trust

Rolf Englund: 

Om centralbankerna inte kunde få upp inflationen från noll till två, hur kan då någon tro att de inom rimlig tid skall få ner den från 8-10 procent till två?