Peter Hooper on Inflation Modeling in the Post-Pandemic Economy

The Federal Reserve and many market analysts have been surprised by the inflation trajectory during the pandemic; first by the persistence and intensity of inflation that began in 2021, and more recently by the improvement that has occurred without a meaningful increase in the unemployment rate. Models that rely on inflation expectations and labor market strength have had relatively weak predictive power during the last few years, calling into question how well we understand what drives inflation. In this episode, Peter Hooper, Managing Director and Vice Chair of Research at Deutsche Bank, discusses inflation models at the Fed and in the post-pandemic economy.