Macroeconomic Credibility and Inflation Simulator

Monetary Policy Levers Central Bank Cockpit

Historical & Policy Presets

Central Bank Credibility Index 45

Perceived institutional independence and historical resolve to squash pricing pressures.

Exogenous Inflation Shock (%) 8.5%

Supply-chain disruptions, energy surges, and fiscal demand stimulus.

Policy Rate Setting (%) 5.0%

Nominal policy interest rate decided by the monetary committee.

Public Trust / Expectation Factor 0.42

Probability that wage negotiations and market pricing anchor to official 2% targets.

Macroeconomic Equilibrium Engine Expectation Shifts & Sovereign Yields

Effective Inflation 6.8% Shock dampened by rates

Bond Yield Spread 285 bps 10Y Sovereign term premium

Credibility Status

Fragile

Index at 45 / 100

Policy Success Score 48 / 100 Composite policy efficacy

Phillips Curve Equilibrium

SRPC NAIRU (4.5%) Operating Point

Yield Curve & Risk Premium

Yield Curve Target Neutral

Policy Diagnostic Assessment

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Source Reference: Financial Times commentary "High inflation or low credibility?" examining the sacrifice ratio in monetary tightening when public inflation expectations de-anchor. Bond spreads model 10-year sovereign risk premia based on central bank commitment credibility and real rate differentials.