Have Central Banks Lost Their Way? - Stephen S. Roach

``... over the last 15 years, the real federal funds rate -- the Fed's benchmark policy rate, adjusted for inflation -- has been in negative territory more than 60% of the time, averaging -0.6% since May 2001... In short, over the last decade and a half, the Fed has gone well beyond a powerful disinflation in setting its policy interest rate. The consequences have been problematic, to say the least. Over the same 15-year period, financial markets have become unhinged, with a profusion of asset and credit bubbles leading to a series of crises that almost pushed the world economy into the abyss in 2008-2009. But rather than recognize, let alone respond to, pre-crisis excesses, the Fed has remained agnostic about them, pointing out that bubble-spotting is, at best, an imperfect science. That is hardly a convincing reason for central banks to remain fixated on inflation targeting.''