"The Bank of England … will require monetary policy response and slower growth to get to equilibrium.”
"What the Bank of England has done seems to be the standard central bank playbook, which is what they should be doing … "
"The key, key variable for so much is productivity. … And we just don't know where it's going to settle after COVID.”
Forbes [is] in favour of the BoE considering "50 basis point" increases to its benchmark rate if the labour market remains tight.
Kristin Forbes says the Fed made it hard for itself with its quantitative easing (QE). "Everyone expected it to end on a certain date … "
For Kristin Forbes qt could be more potent than rate rises, since it would target hot segments of the credit market, such as mortgages.
"Central banks … should not hesitate to reduce their balance sheets during recoveries — especially when inflation is high.”
If governments and central banks are too slow in removing the stimulus ... demand will continue to outpace supply.
"In Europe they chose to take the route of furloughing people, and they were still connected and had a job to come back to."
"On the supply side, it means the inflationary pressures will probably persist even longer."
