Nonetheless, if the key considerations identified in this Policy Brief remain in place, and if monetary policymakers respond to evolving circumstances in a sensible manner, the inflation picture should look considerably better in the next one to three years. As a result of the war, the inflation situation will probably get worse before it gets better, and could do so in dramatic manner if Russian energy exports are banned altogether. ![]() The statistical analysis in this Policy Brief was conducted before Russia invaded Ukraine. The authors find the 2021 surge in inflation resulted mainly from COVID-19-related sectoral developments rather than the classic situation of aggregate demand outstripping the overall economy's long-run productive potential. JeffreyGundlach Inflation FederalReserveYahoo Finances Julia LaRoche spoke with DoubleLine Founder and CEO Jeffrey Gundlach about the Federal Reserve, in. This Policy Brief concludes that although the Federal Open Market Committee (FOMC) was too optimistic in the projections it issued in December 2021, the broad contour of its baseline inflation outlook for 2022 and beyond remains sensible. ![]() ![]() Considerable debate now surrounds the question of whether the Fed is too sanguine in anticipating that too-high inflation will mostly take care of itself over the next few years, even as the unemployment rate remains low and monetary policy remains accommodative. The Federal Reserve and most other analysts failed to anticipate the surge in inflation in 2021.
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