We are FAITed for Permanent Higher Inflation Now

David Stockman Excerpt

Why Keynesian Central Bankers Never Say They’re Sorry

The Federal Reserve now intends to implement a strategy called flexible average inflation targeting (FAIT). Under this new strategy, the Federal Reserve will seek inflation that averages 2% over a time frame that is not formally defined. This means that after long periods of low inflation, the Federal Reserve will not enact tighter monetary policy to prevent rates higher than 2%. One benefit of this flexible strategy to managing the mandate of price stability is that it will impose fewer restrictions on the mandate of full employment.

Our Keynesian monetary central planners never say I’m sorry—they just make excuses until they can cherry-pick the data to show that their destructive policies are working. Today’s producer price report for August, which showed Y/Y change in the PPI final demand index (black line) of just 1.76%, is surely a case in point. Wall Street […] Login or Join Now To Read More