via their effects on production costs), 70 per cent of the overall error made in forecasting inflation in 2022. This share rises to 80 per cent when the effects of food prices, the other volatile component of the consumer price index, are also taken into account.
In the early 1990s, problems in the banking sector were restraining the economic recovery in that country by limiting access to financing and undermining confidence. To counter these “headwinds”, as Alan Greenspan called them, the Fed responded by providing a high degree of monetary stimulus.