Bank of England Monetary Policy Committee member Catherine Mann is giving a talk in Dallas on inflation dynamics.
- says wage and price inflation are sticky downwards
- going forward the length of time inflation remains above target will be important given that inflation expectations tend to drift
- possible drift in expectations implies that policy has to be more aggressive
Dunno about you but I am reading these comments and classifying them 'as clear as mud'.
Here we go, this clears it up:
- The longer inflation remains above target the more aggressive central bankers need to be in reacting to it
- policymakers need to address not just high inflation today but the risk of rising expectations in the future
- policy "has to be more aggressive because it has to address both a drift in expectations as well as the actual inflation"
- The longer we wait ... from a risk management perspective I am more concerned about this embeddedness, the duration, the expectations."
Mann was in favour of a rate hike at the most recent Bank of England Monetary Policy Committee meeting.