Central Banks Lag Powell’s and Summers’s Transformation
Talking Heads Macro
Wed 14 Jun 2023 - 15:00 BST / 10:00 EDT
Summary
Manoj, along with Charles Goodhart, have been particularly prescient on inflation. On this call Manoj updated his inflation expectations with views on central banks, the labour market, China, and services vs goods, by highlighting five structural reversals.
Topics
Powell and Summers have undergone a dramatic transformation, with both now concerned about structural inflation.
Bernanke and Blanchard provide a less-than-convincing interpretation of the causes of inflation, failing to distinguish between demand-led and supply-led inflation.
Central banks are stuck in the mindset of the Beveridge Curve - that is an invitation to persistently higher inflation.
Inflation dynamics themselves are changing, and creating slack in the labour market which holds the key to the direction of inflation.
