Has the Fed lost credibility, as some people have argued (e.g., EJ Antoni)?
One way to assess credibility is to see whether people’s expectations of inflation at the medium term (say 3 years) comes close to the implicit target. With a PCE y/y inflation target of 2%, this means a 2.45% CPI target. Using this, and the NY Fed’s survey of consumers (not economists), we get the following picture:
Figure 1: Bordo-Siklos (2015) credibility measure using 2.45% target (blue), squared deviation of expectation from 2.45% target (green), 75th percentile deviation from 2.45% target (red). NBER defined peak-to-trough recession dates shaded gray. Source: NY Fed, NBER, and author’s calculations.
My answer: No. At a minimum, Fed credibility with respect to medium term inflation is as high as — if not greater than — it was at the end of the Trump administration.
Antoni of all people should avoid questioning anyone else’s credibility. The man is a lying hack who pretends to be an economist. He’s clearly not.
Speaking of credibility
Harris says violent crime is down. Trump says it’s up. Here’s a fact check.
https://www.msn.com/en-us/news/crime/harris-says-violent-crime-is-down-trump-says-it-s-up-here-s-a-fact-check/ar-AA1soJvt?ocid=msedgntp&pc=U531&cvid=7e7ed57cf94d49e881061e8e68d4f3d8&ei=12
You guessed it – violent crime has fallen under Biden-Harris. But it did rise in 2020. Remind me again – who was the President in 2020?