Jerome Powell “It’s possible that this time is really different,”
the Fed chief told reporters last week after raising rates for a tenth straight time.
On a monthly basis, core prices rose 0.4%, equivalent to 5% at an annual rate
In such a situation, it can take a deep recession to get inflation down.
Greg Ip WSJ 10 May 2023
How much pain should we be willing to suffer to squeeze inflation down to that point?
A number of economists, myself included, have long argued that the 2 percent target is too low. This isn’t a radical position; many of the advocates of a 3 or even 4 percent target are as mainstream as they get. Recently, Olivier Blanchard, the former chief economist of the International Fund...
But what if inflation stabilizes at a higher rate—say between 4% and 6%?
In this plausible case, central banks may be compelled to start needlessly raising rates again, catching investors off guard. It would make a lot more sense to raise the inflation target instead, or define it as a wider range.
WSJ 4 December 2022
Englund: Why getting inflation down to 3 percent is probably enough (englundmacro.blogspot.com)
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