Former Fed Chairman: It will be harder for central banks to control inflation in the future

Former Federal Reserve Chairman Bernanke stated that the recent global inflation acceleration may make it more difficult for central banks to control prices in the future. Bernanke suggested that central bank governors may be more vigilant in allowing prices to soar again. He cited research showing that the Federal Reserve policymakers in the 1970s (a period of economic shock from oil prices) were "generally more hawkish than younger people."

In his prepared remarks, Bernanke stated that a key lesson learned from the recent round of inflation is that central bank communication should focus more on the possibility of outcomes diverging significantly from the most likely forecasts, and if reality differs from forecasts, monetary policy will respond appropriately.

A better communication strategy may be for the Federal Reserve to state that its basic forecast assumption is temporary inflation.