Inflation Dynamics My fourth question goes to the heart of monetary policy: What determines inflation? From my perspective, the standard framework for thinking about inflation dynamics used by central bank economists and others prior to the financial crisis remains conceptually useful today.
In particular, during the first quarter of next year, we will be able to better gauge if that is the case. If not, we will have to consider buying other assets, including sovereign bonds in the secondary market, the bulkier and more liquid market of securities available.