Central banks should make clear what QE is for, and then reverse it
ON AUGUST 26TH central bankers will gather for their annual Jackson Hole jamboree with the shine having come off their record. A year ago they had forestalled a financial crisis during the pandemic’s first wave. Today an inflation surge has made a mockery of the Federal Reserve’s forecasts; a parliamentary committee has said that the Bank of England has a “dangerous addiction” to buying bonds; and everybody expects the European Central Bank (ECB) to undershoot, over a period of years, its shiny new “symmetric” inflation target of 2%, unveiled in July.
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The disquieting sense of monetary powerlessness is compounded by the spread of the Delta variant of coronavirus, which threatens to raise prices and…