DALL-E: "Federal Reserve in the style of Picasso" pic.twitter.com/HVX6mlMWBZ

— Miles Kimball (@mileskimball) December 29, 2022

Thanks, to Torsten Slok for highlighting that passage in Jerome Powell's remarks.

My prediction: when the Fed changes its inflation target many years from now, it will revise it downward, not upward. With a robust negative interest rate policy and a "Share Economy," 0 is best.

— Miles Kimball (@mileskimball) December 18, 2022

Other than the self-imposed zero lower bound or false "effective lower bound" on rates imposed by central banks on themselves & sticky wages unmitigated by Martin Weitzman's approach, there is no strong reason for any other inflation target than zero. Absolute price stability!

— Miles Kimball (@mileskimball) December 18, 2022

First, having barred itself from using negative rates, the Fed felt turned instead to "forward guidance" to provide pandemic stimulus. That is, it promised not to raise rates soon. Then to keep its promise, it didn't raise rates quickly even when inflation was ramping up.

— Miles Kimball (@mileskimball) December 18, 2022

On all of this, see:https://t.co/zXAx4ThVARhttps://t.co/YtT8DhjA4i

— Miles Kimball (@mileskimball) December 18, 2022

I've organized what I've written on negative interest rate policy here:https://t.co/Xz2vUwkPuS

— Miles Kimball (@mileskimball) December 18, 2022