I don't follow the second point. They're not forecasts. The information isn't in the "forecast" of 2% inflation in 3 years but rather what you think you are going to have to do to get inflation down to the target. The reaction function is discernible because you are explaining that, subject to a given inflation forecast, here is what policy might have to do to get that.

I don't follow the second point. They're not forecasts. The information isn't in the "forecast" of 2% inflation in 3 years but rather what you think you are going to have to do to get inflation down to the target. The reaction function is discernible because you are explaining that, subject to a given inflation forecast, here is what policy might have to do to get that.

Source:https://twitter.com/nicktimiraos/status/2082857984409907522