Expected inflation is a negative signal, John Cochrane notes

Expected inflation is a negative signal, John Cochrane notes
Expected inflation is negative economic news

John Cochrane addresses the topic of inflation, noting that the current level matches expectations.

He points out that while this situation is not as severe as a debt crisis, it still represents unfavorable news for the economy.

Cochrane previously argued that a one-time unfunded fiscal expansion, rather than central bank policy, was the main driver of inflation. He cited Switzerland as an example of a country with lower inflation due to less fiscal blowout. In another article, he said that using a price level target can help strengthen inflation expectations after periods of deflation.

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