There are always "temporary" factors.
1973: OPEC embargo hit in October. By December CPI was up 8.9% y-o-y & FOMC that month voted to *ease* to offset oil shock.
In 12 months following, inflation would hit 12.1%, while real GDP would fall 1.9%.
federalreserve.gov/monetarypolicy…
1973: OPEC embargo hit in October. By December CPI was up 8.9% y-o-y & FOMC that month voted to *ease* to offset oil shock.
In 12 months following, inflation would hit 12.1%, while real GDP would fall 1.9%.
federalreserve.gov/monetarypolicy…
Shout-out to Alfred Hayes of the @NewYorkFed (newyorkfed.org/aboutthefed/AH…) who was the lone dissent in FOMC vote December 1973
March 1979: y-o-y CPI inflation was 10.3%. FOMC: "A significant easing of rapid rise in prices was suggested... recent increases in prices represented temporary factors." Voted to keep policy unchanged.
In following 12 months inflation would hit 14.6% & real GDP would fall 0.8%.
In following 12 months inflation would hit 14.6% & real GDP would fall 0.8%.
More dissents this time (4) including Volcker who would of course later become FOMC Chair
federalreserve.gov/monetarypolicy…
federalreserve.gov/monetarypolicy…
I'm sure there are more...these were just the most obvious. Arguably this more recent one went the other way, arguing that inflation undershoot was due to temporary factors: nytimes.com/2017/06/14/ups…
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