Chair Jerome H. Powell at the BIS-SARB Centenary Conference Panel Discussion October 22, 2021 | Summary and Q&A

October 22, 2021
Federal Reserve
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Chair Jerome H. Powell at the BIS-SARB Centenary Conference Panel Discussion October 22, 2021


Central banks face challenges of inflation and economic recovery as they navigate the impact of COVID-19 and the need for policy normalization.

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Key Insights

  • 🏦 The recovery from the pandemic and the normalization of monetary and fiscal policies present challenges for central banks.
  • ❓ The effectiveness and flexibility of monetary policy frameworks have been crucial in navigating the pandemic and supporting economic growth.
  • ❓ The coordination between monetary and fiscal policies has been important in providing support to the economy during the crisis.
  • 💦 The impact of technology on economic data collection and the changing nature of work pose challenges for central banks in understanding and assessing economic trends.
  • 🥺 Capital flows into emerging market economies are influenced by global growth dynamics, vaccination rates, and policy responses, leading to divergent recovery paths.
  • ❓ The coordination between monetary, fiscal, and financial policies is necessary to ensure a smooth exit from unconventional monetary policies and support sustainable economic growth.
  • 🍉 The digitalization of the economy and technological advancements have implications for central banks in terms of data analysis, payments systems, and financial inclusion.
  • 🌐 Central banks need to consider the global interconnectedness of financial markets and the spillover effects of their actions on the rest of the world.


well a very very warm welcome to all joining us today from across the world this is a virtual bis sarbs centenary conference it only happens once every 100 years so listen up i'm franco from bloomberg and before introducing our wonderful panel there are a few house or platform rules to highlight first of all microphones must remain muted throughout... Read More

Questions & Answers

Q: Is the current increase in inflation temporary or likely to persist?

Central bankers believe that the recent inflationary pressures are transitory and mostly the result of supply bottlenecks and market dislocations caused by the pandemic. However, they acknowledge that certain countries may face more persistent inflationary pressures and will need to adjust monetary policy accordingly.

Q: How confident is the Federal Reserve that inflation will return to its 2% target next year?

The Federal Reserve acknowledges that inflation is likely to remain elevated well into next year due to ongoing supply bottlenecks and strong demand. However, they expect inflation to gradually return to its target as supply constraints are resolved and job growth increases.

Q: How should central banks respond to the inflation outlook?

Central banks need to assess the persistence of inflationary pressures and use their policy tools accordingly. The key is to balance the need to support economic recovery and avoid unnecessary tightening that could impede growth, while also ensuring price stability.

Q: What are the potential consequences if central banks fall behind the curve on inflation?

Falling behind the curve on inflation could have consequences on financial stability and asset pricing. However, central banks have a track record of successfully managing inflation and communicating their plans to the markets, which helps mitigate the risks of falling behind.

Summary & Key Takeaways

  • Central banks globally implemented unconventional policies and instruments to offset the shocks of the COVID-19 pandemic and promote economic recovery.

  • As economies begin to recover and inflation rises, central banks are now faced with the task of unwinding the pandemic-era policies while avoiding setbacks to the recovery.

  • Different countries are experiencing uneven recoveries and inflationary pressures, influenced by factors such as access to vaccinations and policy spaces, as well as global price pressures and supply bottlenecks.

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