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“Front-loading” monetary tightening: pros and cons

BISness

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Is There a Front Loading Concept in Central Banks?

Central banks don't necessarily have a clear vision of what effect their policy is going to have on the economy and where they might have, when they might have to stop. So central banking tends to evolve very gradually. Interest rate decisions tend to be, you know, very predictable. Central banks in some sense do not like to move very abruptly. It could also potentially signal that an abrupt change in the sense of policy could signal that perhaps that they were wrong in the previous things.

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