Saturday, March 12, 2022

A Great Question

 ...from Jon Steinsson:

Imagine going 3 years back in time and asking any Fed official what they would do if CPI inflation was 7.9% (and core CPI inflation 6.4%).

Does "We will raise rates by 25bp" sound plausible?

Could add to the question: And the unemployment rate is 3.8 percent.