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My 2021 mistake

Scott Sumner · 14 Jan 2023

A change of mind in this piece

The Federal Reserve's average inflation targeting framework is a real commitment to hold inflation near a 2% average across the 2020s, so an overshoot now has to be offset by undershoots later.

No longer holdsI assumed they intended inflation to average roughly 2% during the 2020s.

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  1. Our reading

    The Federal Reserve's average inflation targeting framework is a real commitment to hold inflation near a 2% average across the 2020s, so an overshoot now has to be offset by undershoots later.

    No longer holdsI assumed they intended inflation to average roughly 2% during the 2020s.
    Their words nowThe Fed refused to adopt average inflation targeting, and it made a serious policy error precisely because it failed to do average inflation targeting.

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