Presentation: The Fed Forgets the FIG, Makes a Virtue of Necessity
Levy Economics Institute | May 17, 2021

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There is a wide divide between those who have serious concerns about a run up in inflation and those who are more comfortable about where inflation is headed – including Jay Powell.

The Fed’s more relaxed attitude is rooted in its new monetary framework, featuring an “outcome-based” approach rather than the earlier “forecast-based” approach. The evolution of the Fed’s reaction function was the focus of our 2019 Minsky presentation, titled “Probing Powell's Patience.”

During this presentation for the 29th Annual Hyman P. Minsky Conference, ECRI’s Lakshman Achuthan zeroes in on what the Fed has forgotten, specifically, the Future Inflation Gauge, because it can help us navigate the divide regarding inflation.

Watch the full session here.

Review ECRI's current real-time track record.

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