Monetary planners are questioning whether the age old practice of raising inflation rates to balance out the economy is still working.
Central bankers are operating in a baffling new world that is the reverse of what their predecessors dealt with in the 1970s and 1980s. Instead of struggling to bring inflation down or keep it under control, they now struggle to see the rates go up. Wage increases used to be something they feared. Now they encourage it.
The new chair of the U.S. Federal Reserve, Jerome Powell, is taking over the world’s most powerful central bank at a time when the global economy is still recovering from a decade old financial crisis.
Even though the global economy is picking up, inflation has barely budged, which makes his job even tougher for bankers.
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