No Working Fed Inflation Models, Says Dan Tarullo

The transcript discusses the challenges faced by the Federal Reserve in predicting and managing inflation due to unreliable economic models. It highlights the importance of observing actual inflation trends and the differing predispositions of FOMC members. The need for clear communication about inflation strategies is emphasized, given the lack of precise guidance from existing models.

What is the significance of the different predispositions of FOMC members regarding inflation?

In what ways can the Fed communicate its thinking about inflation to the market?