Krugman Says Markets' Certainty on Inflation 'Makes Me Nervous'

The video discusses concerns about financial conditions easing despite the Fed's intentions for tighter conditions. The speaker, an economist, expresses worry that markets may be overconfident about inflation being under control. This overconfidence could lead to a self-denying prophecy, potentially reigniting inflation. The speaker also questions the importance of Fed credibility, suggesting that real-world actors may not heed Fed statements as much as assumed.

In what way does the economist view the credibility of the Fed in relation to real-world wage and price setting?

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What is the economist's perspective on the market's belief in the Fed's statements about raising rates?

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