Obviously, I think any time prior to yesterday would have an excellent time for the Fed to do more than seriously consider NGDPLT. And obviously, not much has been done of that front outside of chatter.
I saw this article that speculates about who might replace Draghi at the ECB in 2019 on Bloomberg a few days ago, and the list of “frontrunners” doesn’t look encouraging with Jens Weidmann taking the top spot at 85%. If this speculative article has any basis in reality, I fear that the Fed may not have much runway left to get NGDPLT off the ground and running well before the likelihood of negative exogenous shocks coming along increases by some order of magnitude not seen since Trichet was at the helm of the ECB.
A Weidmann ECB would no doubt be a sad predicament for Europe. But under the current straight up IT regime the Fed utilizes, with all of its complex moving parts, that sadness just might have a way of becoming our sadness much more than it needs to be with money becoming tighter than it should be before showing up in inflation measures. By then, it’s too late to prevent damage. If Fedsters don’t like the idea of flirting with the ZLB, or having to experiment with negative rates, or doing QE due to a perpetual hawk from another country not understanding the meaning of tight money because prices adjust, they really need to get NGDPLT out there.
Should the old regime with all of its shortcomings hang on, the bond selling that is going on, don’t count on that going on much past mid-2019; and get ready to kiss IoER good bye because if that is being paid while unemployment is rising, there would deservedly be a political shit storm waiting to happen (with the incorrigible me egging it on!). There is no way they’re going to eat their cake and dodge it too this time around. We see it coming, guys. There is just no excuse to not be ready.