Free Trial

Bailey asked if there could be problems with average inflation targeting

BOE

Bailey asked if Fed could run into problems with average inflation targeting, could it cause problems like when the UK had above target inflation?

Answer: There's a lot of common ground between Fed and BOE - a nominal anchor is important and at the heart of what CBs do. Notes greater flexibility was introduced to BOE market in 2013 over how long to get inflation back to target. This has similarities with the Fed's new system. Maybe different regimes suit different systems. Inflation dynamics are different in the US and UK. Don't know which one is best.

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.