• The latest GDP growth suggests that economic rebound is underway. Strong growth is expected in 2022. o The currently elevated inflation is due to transitory factors. Inflation remains well-anchored. o Banks remain sound and while non-performing loans has increased, banks remain highly capitalized.
Monetary policy should not be used to solve a fiscal crisis. Unfortunately, from my perspective, breaching the boundaries is not confined to the fiscal authorities asking central banks to do their heavy lifting. The Fed and other central banks have also undertaken actions that have blurred the distinction between monetary policy, credit policy, and fiscal policy.