Monetary policy changes drive U.S. inflation persistence, study finds.
The study shows that changes in how the Federal Reserve sets interest rates can explain why U.S. inflation behaved differently from 1975 to 2010. By looking at how the Fed prioritizes controlling inflation and boosting the economy, researchers found that these policy changes directly affected how long inflation stuck around. This suggests that inflation persistence is not a fixed feature of the economy, but can be influenced by how monetary policy is conducted.