VGSH - Weighing The Fed's Monetary Policy Options

Elga assesses the options the Fed is considering during its monetary policy review. This is the third post in a series of blog posts on the Fed and inflation expectations.

The Federal Reserve is considering a monetary policy shift from its flexible inflation forecast targeting to one of several strategies known as make-up strategies. See my earlier blog posts on the reasons for this review and potential economic and market implications.

Make-up strategies explicitly require central banks to make up for past misses of their inflation target. Different make-up strategy monetary policy ideas have

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