Month: August 2020

Central banks doing now what they should have been doing a decade ago The last half of the 2010s was characterized by central banks trying to get back to ‘normal’ or to ‘home’ on interest rates. They were obsessed with getting away from the zero bound, just so they could cut again in the future.
The Federal Reserve rolls out average inflation targeting Fed will target average inflation and put emphasis on ‘broad and inclusive’ employment Shift motivated by underlying changes to the economy including lower potential growth and persistently lower interest rates and low inflation Fed likely to be constrained by its effective lower bound more frequently than in