Using Cleveland Fed data. The Cleveland Fed, looking at the whole range of data, argues that its commitment to maintain inflation at 2-percent is seen as credible. Krugman, maybe rightly, charges that it’s evidence that nobody fears inflation. Could low inflation expectations within short time horizons, however, imply a general lack of confidence in the market health?

I still have to read the working paper that explains the methodology. I find myself “force” to read during my summer break almost as much as I read during the semester. This is supposed to be summer!