Catherine L. Mann discusses how she evaluates the anchoring of inflation expectations. She highlights the anchor as a key achievement of inflation targeting. Catherine outlines that an activist monetary policy strategy is appropriate to keep inflation expectations anchored in the future, particularly in the face of financial market spillovers and volatility from global shocks.
Member of the Monetary Policy Committee
Catherine L. Mann
Speech
Introduction
It is particularly fitting to discuss the value of the inflation anchor at the Reserve Bank of New Zealand, the first official inflation targeter. Today I will focus my remarks on what it is we need to anchor, how to measure whether the anchor is holding, and what a central bank needs to do as domestic economies face more turbulent waters – that is, as economies are likely to experience larger and more frequent shocks, including from financial market spillovers.
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