Despite all of their insights and detailed knowledge, even a bank's own managers and supervisors can be wrong and surprised. Market judgments will never be perfect, but as banks develop and disclose better information, market feedback can play a larger role. For their part, bank supervisors can certainly use the market's help as they deal with ever-more-complex rules and banking practices.
7 The Board staff’s Index of Common Inflation Expectations, which combines the most recent signals from both market- and surveybased indicators, edged up a few basis points, reaching the bottom end of its range of values before the 2014 decline. 8 The inflation dynamics seen over the past few decades have led to inflation that is somewhat below target and relatively stable.