It is possible to see the outlines of an agreement, where the bank accepts the need for some kind of inflation targeting, along with the understanding that it will not raise interest rates soon if the government continues to push reforms and tackle spending.

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No central bank currently follows strict inflation targeting, nor has anyone advocated it for the Fed.

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He said he would only use inflation-targeting if a consensus existed at the Fed that it was a good idea.

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In 1993, we were just entering what you might call the golden age of central bank inflation targeting - when central banks were not only given the task of targeting future inflation but actually seemed to be able to do it.

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That has meant that inflation targeting, especially in Brazil, has been politically easy, since it has meant gradually falling interest rates.

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But it is a signal moment when an Anglo-Saxon economy, wedded to the ideology of inflation targeting for the past 20 years, suddenly begins to "look through" the inflation figures.

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