The Bank of England's Megan Greene on Monetary Policy in a World of Supply Side Shocks | Odd Lots

Ever since Covid, central banks around the world have had the same problem. They have tools that are designed to modulate demand, but so many challenges have involved the supply side of the economy. Whether we're talking about supply chain disruptions, the war in Ukraine, and now the war in Iran, these are all issues for which monetary policy is of limited value. Of course, the temptation is to "look through" these issues, recognizing the fact that these disruptions don't say much about the actual underlying state of the economy. On this episode we speak with Megan Greene, an external member of the Monetary Policy Committee at the Bank of England. We talk about the compounding effects of all these shocks (including the trade war), how she's thinking about the first- and second-order effects of each one, and why, for now, despite the underlying weakness of the UK economy, she remains squarely focused on the risks of higher inflation. Chapters: 00:00:00 - Cold Open 00:01:47 - Guest Introduction: Megan Greene 00:05:12 - Transition from Private Sector to Policy Making 00:09:01 - UK Economic Analysis and International Spillovers 00:12:16 - Supply-Side Challenges and Inflation Persistence 00:18:14 - Central Bank Response to Supply Shocks 00:21:51 - Monetary Transmission Mechanisms 00:25:19 - AI Impact and Supply-Side Analysis 00:28:18 - Long-term UK Economic Challenges 00:31:10 - Fiscal Policy and Bond Market Dynamics 00:36:01 - International Policy Spillovers 00:39:12 - MPC Decision-Making Process 00:42:05 - Evolution of Central Banking 00:45:48 - Monetary Policy Tools and Communication Challenges 00:47:57 - Recent Rate Decision Rationale 00:49:46 - Final Thoughts Watch Bloomberg Vodcasts:    • Bloomberg Video Podcasts | Interviews & More   Watch more Odd Lots episodes:    • Odd Lots   Bloomberg's Joe Weisenthal and Tracy Alloway analyze the weird patterns, the complex issues and the newest market crazes. Join the conversation every Monday and Thursday for interviews with the most interesting minds in finance, economics and markets. Join the conversation: discord.gg/oddlots Subscribe to Bloomberg Podcasts: https://bit.ly/BloombergPodcasts Check out more Odd Lots:    • Odd Lots (Audio)   Get the Odd Lots newsletter: https://www.bloomberg.com/account/new... And for all things Odd Lots, visit https://www.bloomberg.com/oddlots #Investing #Markets #Finance #Bloomberg #Podcast #OddLots Visit us: https://www.bloomberg.com/podcasts For coverage on news, markets and more: http://www.bloomberg.com/video Visit our other YouTube channels: Bloomberg Television:    / @markets   Bloomberg Originals:    / bloomberg