Creating an environment of stagflation, reminiscent of the 1970s, will not help businesses, the unemployed, or the consumer. It is an outcome we must carefully guard against. We also need to ensure that Fed policy remains credible.
Early in the crisis, as the COVID event unfolded, the FSB provided a forum where members met regularly—some part of the FSB was meeting almost constantly in the early weeks—to exchange information about the trajectory of the COVID event, policy responses across member jurisdictions, and areas where the potential for spillovers needed to be addressed. Navigating a crisis is no small feat.