Dictionary
overshooting
verb
Present participle of overshoot
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Exact(60)
This is unavoidably a value judgement as it entails weighing up the cost and inconvenience of reducing fossil fuel use against the risks of exceeding 2C (which itself splits scientific opinion: some experts think exceeding even 1.5C could be disastrous, while others are less nervous about overshooting 2C a little).
That would land the central bank in trouble for undershooting rather than overshooting the 2% target.
Just a little tighter Sky's limit ReprintsThe Bank is worried about overshooting if the economy has already begun to slow.
One might argue that a steadfast commitment to a 2% inflation target demands some overshooting to make up for this long period of underperformance; after all, a central bank that tolerates undershooting of its target but not overshooting is missing its target on average.Fourth, it's not clear that the Fed has entirely ruled out something of that nature.
Though it would be a very good thing to do, I don't expect them to say that, in order to defend the integrity of their 2% inflation target, they intend to make up the shortfall in inflation accumulated over the past two years with an 18-month period of overshooting.
I certainly agree that the mood of the Fed is not what one would call favourably disposed toward some overshooting.
As one European central banker puts it: "With all the sophistication of their risk-management systems, a whole series of the most powerful institutions in finance went ahead and made the classic errors of not watching credit quality and overshooting".
While part of the currency slump is a "natural" correction to reflect high inflation, he said, "foreign exchange markets have a notorious history of overshooting.
Traders do not see the Fed overshooting, not in the least.One question is which markets respond more to economic news.
A related problem is that the consequences of overshooting or undershooting the 2% target are not symmetrical.
But it will require more stimulative monetary policy and inflation overshooting for a while.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com