Why do central banks ignore asset prices?

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Via FTAlphaville’s Claire Jones:

Comments on our articles about central banks’ attempts to fix the global economy through printing trillions in whatever currency tend to be a bloodbath. The prime swipe being that policymakers are wrong to carry on unleashing more and more stimulus on the grounds that they are falling short of their inflation targets because, actually, there is loads of inflation if you look at asset prices.

The voice of our dear readers mirrors the broader public debate, not least because rampant inflation in asset prices has a knock-on effect on a lot of people’s housing costs, even if they are not buying a property. We’d recommend this article, from Bloomberg, for a sense of the debate:

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.