"[W]e are about to pay the price for [central banks'] gradualism. Bloomberg just suggested that there is a 100% chance of recession next year.... By not tightening aggressively at the end of 2021, [central banks] let inflation get much more deeply entrenched in the economy. With even core inflation now rising, the pain associated with bringing it down will be much greater. A small recession in 2022 would have been better than a bigger one in 2023.
"As Matt Yglesias likes to say, if the Fed [and other central banks] expects to gradually raise rates by 200 or 300 basis points over the next year, [they] should probably do it right away. It’s like getting into a cold lake—just jump in; don’t wade in one inch at a time.
"[As long as they exist, central banks] need to stop worrying about scaring markets and focus on their core responsibilities."~ Scott Sumner from his post 'Gradualism Turned Out to Be a Mistake' [interjections mine]
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