Brian Chappatta, Columnist

Fed’s Infighting Shows It Lacks Answers About Inflation

A senior economist at the central bank offers a stark contrast to Chair Jerome Powell’s focus on expectations about the pace of price growth.

September 28, 2021 at 10:00 AM UTC

By Brian Chappatta

Brian Chappatta is managing editor of Bloomberg News' leveraged finance and distressed debt teams. He was previously managing editor and team leader of its wealth group. Before that he was a Bloomberg Opinion markets and finance columnist and a bonds reporter for Bloomberg News.

Is Fed Chair Jerome Powell’s focus on inflation expectations warranted?
Photographer: Michael Nagle/Bloomberg

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A day after Federal Reserve Chair Jerome Powell said at a press conference that “inflation expectations are terribly important,” Jeremy Rudd, a senior Fed economist who has served at the central bank since 1999, released a new paper.

The title: “Why Do We Think That Inflation Expectations Matter for Inflation? (And Should We?)” His answer to the parenthetical question was a resounding no.