Conundrum again?


Luckily the decision process of the Fed is organized around a table composed of different professionals, the article you can reach using the link above reports the worries of one of the Fed board members. William Dudley, the president of the NY Fed, by the reported opinion, seems to stick to a stable Phillips curve definition. Robert Solow first, Alan Greespan later expressed some doubts on the stability of the curve due maybe to miscalculations on the productivity growth rate. The Fed itself has lately moved the full employment rate to new and lower levels, implicitly accepting that the Phillips curve has moved somehow.

The balance between unemployment and inflation seems to be under discussion again as the article you can read at the following link seems to support (supported by one other member of the Fed board).

Difficult markets, recent moves show a clear direction: will it be the right one? Is it an emotional herd?

Central bankers appear much more relaxed than other market actors.


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