Central banks around the world built their credibility on a simple promise: keep inflation near a target, usually around 2%, and everything else will sort itself out. Daniel Moss, a veteran Bloomberg Opinion columnist, is now arguing that this framework is under more stress than at any point since it became the global standard, and that the shocks hitting the system are only going to get worse.
The case for reform, not retreat
Writing from Singapore, where he’s been a close observer of Asian and global monetary policy for decades, Moss laid out his argument in an August 2026 column titled “Ditch Inflation Targets? Better to Overhaul Them Instead.” The core thesis is straightforward: the world has entered an era of more frequent and more severe economic disruptions, from geopolitical conflicts to supply chain fractures to energy price volatility. These disruptions make it harder for central banks to hit their inflation targets consistently.
The natural temptation, especially after years of above-target price growth in many economies, is to declare the whole inflation-targeting experiment a failure. Moss pushes back against that impulse. Inflation-targeting regimes have expanded steadily since the late 20th century and have, by his assessment, shown genuine resilience even when critics have called them outdated or counterproductive.
Where the pressure is showing
Moss has pointed to specific cases where inflation pressures have tested central bank frameworks. The Philippines, for instance, has faced inflation episodes that highlight how vulnerable emerging markets are to external price shocks, particularly in food and energy.
Rising interest-rate shocks are another recurring theme in his recent work. When central banks respond to inflation by hiking rates aggressively, they create their own set of disruptions: higher borrowing costs ripple through housing markets, corporate balance sheets, and government debt burdens.
Moss’s career gives him a long lens on these dynamics. He previously served as executive editor for global economics and government at Bloomberg News and covered financial crises firsthand, including the Asian Financial Crisis from Kuala Lumpur in the late 1990s. His position sits in what might be the most uncomfortable spot on the spectrum: the middle. Keep the targets, but accept that they need to evolve. Allow for wider bands, or longer time horizons, or more explicit acknowledgment that some inflationary pressures lie beyond any central bank’s control.
What this means for markets and investors
The practical implications of Moss’s argument are significant for anyone with money in the game. If inflation targets become more flexible, or if central banks adopt reformed frameworks that tolerate higher price growth in certain conditions, the interest rate path becomes harder to predict.
For bond markets, less predictable rate paths mean more volatility. Fixed-income investors who have spent decades building strategies around central bank forward guidance may find that guidance becoming fuzzier. A world where a central bank says “we’re targeting 2% inflation, give or take, over a rolling three-year period, adjusted for supply-side shocks” is fundamentally different from one where the target is a hard number with an implied commitment to act when it’s breached.
Currency markets could also see increased turbulence. When different central banks reform their frameworks at different speeds, or in different directions, the resulting divergence in monetary policy creates opportunities and risks for currency traders. An Asian central bank that widens its inflation tolerance band while the Federal Reserve maintains a tighter framework would create meaningful pressure on exchange rates.