Further unanchoring is not strictly about inflation

Source: Cobden Centre
by Jeffrey P Snider

“The defining mantra for monetary policy is that it is better to have 2% inflation than risk 1933. But how does one get 2% inflation? In truth, by Greenspan’s own words, and not just those of this one speech, they didn’t really know. FOMC deliberations no longer tied to money meant considerations about a great deal of economic as well as financial indications and prices. It was a ‘best judgment’ regime, where policymakers determined well in advance when pressures, either toward inflation or its opposite, were detected. ” (03/22/17)