Former Federal Reserve Chairman: Central Bank will find it harder to control inflation in the future

Former Federal Reserve Chairman Bernanke stated that the recent acceleration of inflation worldwide could make it more difficult for central banks to control prices in the future. Bernanke implied that central bank governors might be more vigilant about allowing prices to soar again. He cited research showing that policymakers at the Federal Reserve in the 1970s (a period when the economy was hit by oil price shocks) were "generally more hawkish than younger people". In his prepared remarks, Bernanke said a key lesson learned from the latest round of inflation is that central bank communication should pay greater attention to outcomes potentially diverging greatly from most likely forecasts, and if reality differs from predictions, monetary policy will respond appropriately. A better communication strategy might be for the Fed to declare its basic forecast assumption is temporary inflation.