Peter Ireland on the Fed’s Pandemic Performance and the Path Forward for Monetary Policy
Macro Musings with David Beckworth
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How Do We Get to This Point?
How did we get to this quagmire that the fed finds itself in? We talked about it earlier, high inflation, but the fed also wants to have a soft landing. Maybe the framework's part of it, but we had a pandamic. It's a lot of uncertainty, but maybe even an ideal framework would have had a hard time handling. But then again, if you accept and this seems like the zero lower bound is going to be a recurrent constraint that prevents the fed from delivering sufficient monetary accommodation during recessions,. Then how exactly do you prevent inflation from falling below two % on average over the cycle?
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