{"id":348120,"date":"2025-09-15T19:47:59","date_gmt":"2025-09-16T00:47:59","guid":{"rendered":"https:\/\/michigandigitalnews.com\/index.php\/2025\/09\/15\/the-danger-of-fed-credibility-under-assault\/"},"modified":"2025-09-15T19:47:59","modified_gmt":"2025-09-16T00:47:59","slug":"the-danger-of-fed-credibility-under-assault","status":"publish","type":"post","link":"https:\/\/michigandigitalnews.com\/index.php\/2025\/09\/15\/the-danger-of-fed-credibility-under-assault\/","title":{"rendered":"The Danger of Fed Credibility under Assault"},"content":{"rendered":"

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If credibility is degraded, then tariff induced cost-push shocks are less likely to manifest as one-off price level increases, and more likely to spur a bout of inflation.<\/p>\n

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Figure 1:<\/strong> Bordo-Siklos measure of Fed inflation credibility (blue). Calculation assumes CPI target consistent with PCE target is 2.45%. September observation is preliminary. Light orange shading denotes Trump administrations. Orange dashed line at \u201cLiberation Day\u201d. NBER defined peak-to-trough recession dates shaded gray. Source: BLS, NBER, author\u2019s calculations.\u00a0<\/em><\/p>\n

From Bloomberg:<\/p>\n

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\u201cTo the extent that the Fed\u2019s decision this week is seen as a capitulation to political pressure,\u00a0a new layer of risk is being added<\/a>\u00a0to\u00a0US financial markets and the dollar<\/a>,\u201d [ David Kelly, chief global strategist at JPMorgan Asset Management] said.<\/p>\n<\/blockquote>\n

See also Griffin-Kashyap in WSJ<\/em><\/a>.<\/p>\n<\/p><\/div>\n


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